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LI  BR  AR  Y 

OF   THE 

UNIVERSITY   OF   CALIFORNIA 

GIRT    OK 


Received 
Accessions 


Shelf  No. 


SI 


OF 


DISTRIBUTIVE  CO-OPERATION, 


[PREPARED  IN  ACCORDANCE  WITH  THE  PROVISIONS  OF  CHAP.  51, 
or  THE  RESOLVES  OF  1885.] 


BY 
CARROLL  D.  WRIGHT, 

CHIEF  OF  THE  BUREAU  OF   STATISTICS  OF  LABOR. 


BOSTON : 

WRIGHT  &  POTTER  PRINTING  CO.,  STATE  PRINTERS, 

18  POST  OFFICE  SQUARE. 

1885. 


0f 


ACTS  AND  RESOLVES.  OF  1885, . 


RESOLVES,  CHAPTER  51. 

RESOLVE  PROVIDING  FOR  THE  PUBLICATION  BY  THE 

BUREAU  OF  STATISTICS  OF  LABOR  OF  INFORMA- 
TION CONCERNING  CO-OPERATIVE  DISTRIBUTION 
IN  GREAT  BRITAIN. 

Resolved,  That  the  chief  of  the  bureau  of  statistics  of  labor  be 
and  he  is  hereby  instructed  to  prepare  and  publish  for  distribution  a 
pamphlet  descriptive  of  the  history,  methods  and  present  condition 
of  co-operative  distribution  in  Great  Britain  ;  and  he  may  expend  in 
the  preparation  and  publication  of  the  same  a  sum  not  exceeding 
eighteen  hundred  dollars.  Approved  May  12,  1885. 


[The  valuable  services  of  Mr.  Horace  G.  Wadlin,  in  the  collection  of  ma- 
terial for  and  preparation  of  the  following  manual,  are  gratefully  acknowl- 
edged.] 


A    MANUAL 


OP 


DISTRIBUTIVE  CO-OPERATION. 


Upon  an  order  introduced  in  the  Massachusetts  House  of 
Representatives,  January  29,  1885,  by  Mr.  Henry  M.  Cross 
of  Newburyport,  a  Resolve  was  reported  by  the  Committee 
on  Labor,  passed  by  both  branches,  and  approved  March  12, 
1885,  directing  the  Chief  of  the  Bureau  of  Statistics  of  Laboi 
"'to  prepare  and  publish  for  distribution  a  pamphlet  descriptive 
of  the  history,  methods,  and  present  condition  of  co-operative 
distribution  in  Great  Britain."  Under  that  Resolve  the  account 
contained  in  the  following  pages  has  been  prepared,  and,  besides 
its  publication  in  pamphlet  form,  is  also  presented  as  Part  I.  of 
the  Seventeenth  Annual  Report  of  the  Bureau. 

The  publication  directed  by  the  Resolve  relates  to  facts  and 
not  argument,  and  it  has  been  our  aim  to  present  these  facts  with 
fulness.  For  that  purpose  we  have  not  hesitated  to  reproduce 
the  statements  of  others,  generally  in  their  Own  language, 
whenever  such  statements  were  concise  presentations  of  the 
particular  facts  desired. 

In  regard  to  certain  phases  of  the  subject  it  has  seemed  best 
to  let  co-operators  speak  for  themselves  rather  than  to  embody 
their  ideas  in  our  own  words.  In  all  such  cases  we  have  given 
due  credit  in  foot  notes,  and  in  further  acknowledgment  we 
desire  here  to  mention  our  indebtedness  to  the  pamphlets  and 
other  publications  of  the  Central  Co-operative  Board,  Man- 
chester, England ;  the  annual  reports  of  the  Co-operative  Con- 
gresses of  Great  Britain ;  the  Annuals  issued  by  the  English 
Co-operative  Wholesale  Society ;  the  works  of  George  Jacob 
Holyoake,  and  to  the  little  manual,  entitled  "Working  Men 

£5] 


6  A  MANUAL   OF 

Co-operators",   by  Arthur   H.    Dyke   Acland    and    Benjamin 
Jones.* 

The  publications  of  the  Central  Co-operative  Board,  partic- 
ularly those  relating  to  practical  details,  are  invaluable  to  any 
one  desiring  to  engage  in  co-operative  distribution.  Full  lists 
of  these  publications  may  be  obtained  upon  application  to  the 
Secretary,  City  Buildings,  Corporation  Street,  Manchester, 
England.  The  reports  of  the  Congresses  and  the  Co-operative 
Annuals  contain  much  valuable  statistical  matter.  The  works 
of  Holyoake,  published  by  Triibner  &  Co.,  London,  and  to  be 
obtained  through  any  bookseller,  are  exhaustive  and  authentic 
as  relates  to  the  history  of  the  co-operative  movement  in  Great 
Britain,  while  the  manual  by  Acland  and  Jones  is  a  brief  and 
inexpensive,  yet  exceedingly  useful  handbook  covering  the  whole 
subject. 

WHAT  IS  CO-OPERATION? 

At  the  outset  it  is  proper  to  define  exactly  what  the  subject 
is  that  we  are  to  treat.  The  term  co-operation  as  applied  in 
practice  at  the  present  day  is  not  used  in  its  strict  etymological 
meaning.  Nor  is  co-operation  as  at  present  conducted  what  its 
early  advocates  proposed.  Etymologically"  considered  co-op- 
eration means  to  labor  together.  It  has  an  industrial  significance. 
On  the  contrary  the  co-operation  of  the  present  has  won  its 
greatest  success  in  commercial  rather  than  industrial  directions. 
Its  application  to  productive  industry  is  still  largely  experi- 
mental, and  the  experiments  that  have  succeeded  are,  in  most 
instances,  not  purely  co-operative. 

Co-operation  as  proposed  by  its  early  advocates  contemplated 
a  social  transformation,  introducing  into  the  operations  of  in- 
dustry and  trade,  that  is,  into  the  operations  of  production  and 
distribution,  such  principles  as  would  overcome  the  evils  that 
attend  competition.  It  aimed  to  reconstruct  society  upon  the 
communistic  basis,  its  motto  being  « «  each  for  all  and  all  for  each," 
rather  than  the  too  common  one  of  "every  man  for  himself." 
Individualism  it  deemed  contrary  to  the  general  good,  and  it 
sought  to  substitute  for  individualism  some  system  of  joint  en- 
deavor through  which  the  laborer,  the  capitalist,  and  the  con- 

*  Cassell  &  Co.,  Publishers,  London,  Paris,  and  New  York,  1884. 


DISTRIBUTIVE  CO-OPERATION.  7 

sumer  should  be  brought  into  relations  of  mutual  help  rather  than 
remain  in  their  usual  position  of  rivalry.  Ideally,  something  like 
this  is  still  hoped  for  by  ardent  co-operators,  but  practically  no 
such  social  transformation  has  yet  taken  place.  Competition  still 
flourishes,  and  the  reconstruction  of  society  upon  the  commu- 
nistic basis  is  not  to-day  the  chief  end  of  co-operative  endeavor. 
The  co-operation  of  the  present  that  is  highly  successful,  and 
which  we  are  mainly  to  consider  here,  relates  to  the  distribution 
of  products  rather  than  to  production .  It  is  co-operative  trading, 
not  co-operative  labor,  if,  indeed,  the  latter  term  is  permissible. 
We  shall  show  hereafter  how  success  in  co-operative  distribution 
has,  in  some  cases,  paved  the  way  to  experiments  more  or  less 
complete  and  more  or  less  successful  in  co-operative  production, 
but  it  is  chiefly  with  distribution  that  we  have  to  deal ;  and  it  is 
in  this  field  that  co-operation,  in  the  sense  of  mutual  effort,  has 
won  its  greatest  triumphs.  The  benefits  obtained  by  those  who 
have  engaged  in  this  form  of  co-operation  are  so  great  that  its 
history,  methods,  and  present  condition  are  well  worth  our  study 
and  will  amply  reward  our  investigation. 

One  who  by  virtue  of  his  experience,  and  his  services  to  the 
co-operative  movement,  is  certainly  entitled  to  formulate  a  defi- 
nition has  presented  the  following  : 

"  Co-operation,  in  the  social  sense  of  the  word,  is  a  new  power  of 
industry,  constituted  by  the  equitable  combination  of  worker,  cap- 
italist, and  consumer,  and  a  new  means  of  commercial  morality,  by 
which  honesty  is  rendered  productive. 

"  It  is  the  concert  of  many  for  compassing  advantages  impossible 
to  be  reached  by  one,  in  order  that  the  gain  may  be  fairly  shared  by 
all  concerned  in  its  attainment."  * 

This  definition  which  is  comprehensive,  while  no  doubt  em- 
bodying the  author's  views,  would  not  be  accepted  by  all 
co-operators,  many  of  whom  are  unwilling  to  admit  the  claim 
of  the  consumer,  as  a  consumer,  to  a  share  of  the  profits  arising 
from  productive  effort.  However  this  may  be,  all  are  agreed 
that  in  co-operative  distribution  the  consumer  should  share  in 
the  profits  derived  from  his  trade.  This  feature  is  essential 
in  modern  co-operative  distributive  associations  and  distin- 

»  Holyoake.    History  of  Co-operation,  Vol.  I.,  page  2. 


8  A  MANUAL  OF 

guishes  them  from  early  attempts  in  this  direction,  and  from 
joint  stock  associations. 

Joint  stock  associations  divide  profits  by  payment  on  capital, 
that  is,  on  shares.  Co-operative  distributive  associations  divide 
profits  on  purchases,  not  on  shares,  and  pay  to  shareholders  a 
fixed  rate  of  interest  on  the  capital  invested. 

Applying  to  the  scheme  of  co-operative  distribution  the  spirit 
of  the  last  clause  of  Mr.  Holyoake's  definition  just  quoted,  we 
may  define  it  as  *-^A  union  of  many  consumers  for  the  pur- 
pose of  securing  in  the  purchase  of  commodities  advantages 
impossible  to  be  obtained  by  one,  through  an  equitable  division 
of  the  profits  derived  from  their  purchases.  -C^ 

Such  co-operative  unions  are  upon  the  continent  of  Europe 
termed  "  consumers'  societies."  As  has  been  said  by  another, 
"  they  have  succeeded  in  making  20s.  of  earnings  go  as  far  as 
22  or  23  in  an  ordinary  shop.  The  true  problem  of  co-opera- 
tion lies  deeper,  that  is,  how  to  secure  the  original  20s.  in 
workshops  under  their  own  management." 

Leaving  for  the  present  this  deeper  problem  we  shall  describe 
the  manner  in  which  the  distributive  societies  of  England  have 
grown  up,  their  mode  of  operation,  and  what  they  have  accom- 
plished. Afterward  we  shall  glance  briefly  at  the  other  phases 
of  the  co-operative  movement. 

HISTORY   OF  THE   MOVEMENT. 

At  the  beginning  of  the  present  century  the  condition  of  the 
common  people  attracted  the  attention  of  certain  social  philoso- 
phers who,  seeing  the  misery  that  often  existed  among  the 
working  classes,  endeavored  to  devise  some  scheme  for  the 
reconstruction  of  society  upon  more  favorable  conditions. 
Among  these  social  reformers  Saint  Simon  and  Fourier,  in 
France,  and  Robert  Owen,  in  England,  each  in  his  own  way, 
hoped  to  re-create  society  upon  an  ideal  basis  by  a  sudden  and 
radical  change  from  existing  conditions.  It  is  now  seen  that  it 
is  only  by  gradual  steps  that  society  advances,  and  that  num- 
berless influences  and  the  slow  progress  of  years  are  necessary 
to  effect  important  social  changes.  Therefore  it  is  not  surpris- 
ing that  none  of  these  schemes  succeeded,  although  some  of 
them  were,  in  their  day,  exceedingly  attractive. 

The  influence  of  Robert  Owen  upon  the  co-operative  move- 


DISTRIBUTIVE  CO-OPERATION.  9 

ment  in  England  was  immediate  and  important.  He  has, 
indeed,  been  credited  with  the  origin  of  the  term  co-operation 
as  applied  to  industry.  "In  no  literature,"  says  Holyoake, 
"  before  the  active  days  of  this  social  devisor,  does  any 
trace  of  this  new  industrial  shibboleth,  co-operation,  appear."  * 
"The  principles  of  co-operation  were  first  put  together  and 
clearly  stated  by  Mr.  Owen  in  his  earliest  writings."  f 

.But  by  co-operation,  Owen  meant  a  communistic  organization 
of  society  for  the  mutual  benefit  of  all.  Between  1820  and 
1830  great  enthusiasm  was  aroused  in  England  in  this  direc- 
tion, having  its  practical  outcome  in  the  establishment  of  com- 
munities upon  the  co-operative  plan.  The  first  newspaper 
organ  devoted  to  the  theories  then  in  vogue  was  the  Economist 
in  1822,  although  Owen  and  others  more  or  less  inspired  by 
him  had  previously  published  pamphlets  unfolding  their  plans 
for  social  improvement.  William  Thompson,  in  1827,  pro- 
duced a  little  work  called  "Labor  Rewarded,"  in  which  he 
aimed  to  set  forth  a  scheme  for  a  more  just  distribution  to  labor 
of  its  share  of  product,  and  presented  directions  for  the  estab- 
lishment of  co-operative  companies.  Later  the  Combes  and 
Robert  Dale  Owen,  among  others,  aided  the  movement  with 
their  pens. 

In  1824  the  London  Co-operative  Society  was  formed.  In 
its  rooms  were  held  meetings  for  discussion,  and  it  also  under- 
took the  sale  of  goods  made  by  provincial  societies.  In  1826 
the  Co-operative  Magazine  and  Monthly  Herald  was  established, 
this  being  the  second  co-operative  organ  in  England,  and  two 
years  later  the  Co-operator,  a  four-paged  penny  paper,  was 
published.  The  latter,  however,  failed  in  1830.  Meantime 
other  periodicals  and  a  number  of  societies  were  established  for 
the  discussion  and  advancement  of  co-operative  views. 

The  first  co-operative  congress  was  held  at  Manchester  in 
May,  1830.  Fifty-six  societies  were  represented  by  delegates. 
These  societies  comprised  3000  members,  who  had  by  co-oper- 
ative trading  and  weekly  contributions  acquired  within  fifteen 
months  £6000  capital.^  Congresses  continued  to  be  held  for 
severa.  years. 

*  History  of  Co-operation,  Vol.  I.,  page  53. 
t  Co-operative  Miscellany,  No.  2,  1830. 
.  J  History  of  Co-operation,  Vol.  I.,  pages  150,  151. 


'10  A  MANUAL  OF 

There  were  said  to  be  nearly  300  societies  in  Great  Britain 
in  1830,  their  aggregate  membership  being  about  20,000. 

Most  of  the  periodicals  started  before  1830  had  ceased  to 
exist  by  that  year.  In  1832  Owen  began  the  publication  of  a 
new  paper  called  the  Crisis,  and  from  time  to  time  thereafter 
others  appeared  in  the  British  Provinces. 

The  early  attempts  at  co-operation  took  various  forms.  It 
seemed  as  if  those  interested,  intoxicated  with  the  hope  of  a 
brighter  world  than  that  with  which  they  were  unhappily  famil- 
iar, were  ready  to  accept  any  scheme,  no  matter  how  wild  or 
ill-digested,  that  had  in  it  the  promise  of  improvement.  The 
enthusiasm  with  which  these  schemes  were  embraced  afforded 
in  most  instances  a  striking  contrast  to  the  failure  which  finally 
overtook  them.  But  the  discussion  of  the  general  subject  in 
congresses  and  through  the  medium  of  the  press  widely  dis- 
seminated co-operative  views.  Most  of  the  enterprises  sug- 
gested were  based  upon  the  communistic  plan.  The  central  idea 
around  which  clustered  the  co-operative  experiments  projected 
by  the  leaders  of  the  movement  was  in  those  days  the  re-casting 
of  society  upon  the  basis  of  a  community  of  united  interests. 
But,  as  Mr.  Holyoake  has  pointed  out,  "  these  dreams  were 
postponed  on  the  part  of  many,  and  were  regarded  as  separate 
objects  by  more,  and  not  regarded  at  all  by  the  majority  of 
co-operators,  who  had  formed  stores  and  established  numer- 
ous manufacturing  societies  for  the  mutual  advantage  of  the 
members."  * 

The  following  table  shows  existing  registered  co-operative 
stores  established  before  1844,  with  the  date  of  their  estab- 
lishment, and  the  date  when  the  profits  were  first  divided  on 
purchases.f 

*  History  of  Co-operation,  Vol.  I.,  page  188. 
'    f  Workingmen  Co-operators,  page  23. 


DISTRIBUTIVE  CO-OPERATION. 


11 


Existing  Registered  Co-operative  Societies  established  before  1844. 


Date 
established. 

NAME  OP  SOCIETY. 

When  profits  were  first  divided 
on  purchases. 

1777 

1878 

1795 

1801 
1801 

Hull  A.  C.  Mill,      
HullS.  C.  Mill  
Whitby  Corn  Mill,  .        .        . 

1855 
Not  known. 
Not  known. 

1812 

1813 

1816 
1817 

Sheerness  Economical,  .... 

1863 
1818 

1821 

Larkhall,         

Profits  divided  equally. 

1827 

1827 

1828 

Bridgeton,       

1828 

1829 

1861 

1829 

Huddersfield  W.,    

Not  known. 

1830 

Bannockburn,         ..... 

1866 

1830 

Huddersfield  B.,      

1834 

1831 

Forfar,  West  Town,        .... 

1863 

1832 

FoleshillL.  L  

1865 

1832 

Foleshill  S.  S.  R.,    

1836 

1832 

1850 

1832 
1833 
183  1 

Stockport  Great  Moor,   .... 
Arbroath,        
Forfar,  West  Port,  

1832 
1861 
1863 

1834 
1836 

Kirkheaton,     ...... 
Glasgow,  St.  Rollox,       .... 

1867 
1836 

1837 

Devonport  Coal,      ..... 

Profits  divided  equally. 

1838 

1838 

Leslie  Bread,  ...... 

1872 

1839 
1840 
1840 

Hawick,  
Darvel,    ....... 
Hepworth,       ...... 

Shortly  after  starting. 
1859 
Not  known. 

1840 
1840 

Leslie,     
Netherton,       ...... 

1864 
Not  known. 

1840 

Tillicoultry,     .         .         .         .         .        . 

1864 

1842 

Freuchie,         ...... 

1862 

1842 

Galashiels,      ...... 

1847 

1842 
1843 

Middleton-in-Teesdale,  .... 
Falkland,         '   . 

1874 
1865 

1843 

Kettle,     .        .        . 

1863 

Most_of_the  early  stores  did  not  succeed.  The  reasons  for 
their  failiirjQ.jyjsre  various.  The  law  did  not  afford  co-operative 
enterprises  adequate  protection,  and  through  its  technicalities 
unprincipled  men  might  easily  embezzle  the  funds  of  the 
society  and  escape  punishment.  Non-adherence  to  the  cash 
system  was  in  many  cases  disastrous.  But,  besides  these  diffi- 
culties under  which  co-operative  stores  labored,  the  great  ob- 
stacle to  success  was  the  defective  plan  upon  which  they  were 


12  A  MANUAL  OF 

based.  Most  were  joint  stock  concerns  dividing  profits  among 
shareholders  only,  and  no  arrangement  was  provided  for  capi- 
talizing profits  upon  the  plan  of  allowing  dividends  to  remain 
undrawn  as  interest-bearing  deposits.  This  "we  shall  hereafter 
see  was  remedied  in  the  Rochdale  scheme  of  co-operative  dis- 
tribution which  has  become  so  successful.  By  reference  to  the 
table  just  presented  it  will  be  noticed  how  few  of  the  early 
stores  still  remaining  divided  profits  on  sales  until  after  the 
year  1844  in  which  the  Rochdale  scheme  was  made  public. 
Many  early  stores  failed,  also,  because  after  the  first  enthu- 
siasm was  exhausted  members  had  no  sufficient  motive  to  con- 
tinue their  work. 

After  the  social  reformers  whom  we  Jiave  named  —  Saint 
Simon,  Fourier,  and  Owen,  — came  Leroux,  Cabet,  Proudhon, 
and  Greaves,  and,  finally,  M.  Louis  Blanc,  who,  in  1840,  pub- 
lished "  IS  organization  du  Travail"  a  work  which  gave  a 
decided  impetus  to  co-operative  endeavor. 

Blanc  proposed  to  reorganize  labor  under  government  direc- 
tion so  as  to  regulate  production  and  ultimately  to  prevent 
competition.  In  brief,  he  contemplated  the  establishment 
of  social  factories,  under  government  patronage  and  control, 
upon  a  plan  at  first  circumscribed  but  adapted  to  indefinite  ex- 
pansion. The  regulations  governing  these  social  factories  were 
to  be  made  by  legislative  enactment  and  to  have  the  force  of 
law.  All  workmen  of  good  character  were  to  be  eligible  to 
admission  to  these  factories,  limited  only  to  the  number  possi- 
ble to  be  employed  with  a  given  amount  of  capital.  Salaries 
were  to  be  equal. 

Mutual  interest  in  .  the  success  of  the  factories  was  to  be 
secured  by  the  mode  of  division  of  profits  which  were  to  be 
apportioned  in  three  parts,  one  to  be  distributed  to  all  members 
equally ;  one  set  aside  for  support  of  the  aged  or  incapacitated 
and  to  alleviate  the  effect  of  industrial  crises ;  and  the  third 
part  to  be  used  for  the  extension  of  the  industry,  the  idea 
being  so  to  expand  the  business  as  to  furnish  employment  to 
all  who  might  desire  to  join. 

Upon  the  scheme  proposed  ' '  each  social  factory  may  be 
composed  of  different  businesses  grouped  round  some  great 
industry,  parts  of  the  same  whole,  obeying  the  same  laws,  and 
sharing  in  the  same  advantages." 


DISTRIBUTIVE  CO-OPERATION.  13 

M.  Blanc  contemplated  the  admission  of  capitalists  to  these 
associations  or  factories  upon  the  basis  of  a  fixed  interest  on 
capital  invested,  but  not  to  share  in  profits  except  as  laborers. 

With  respect  to  M.  Blanc's  influence  upon  the  growth  of  the 
co-operative  idea,  Mr.  Thomas  Hughes,  after  pointing  out  that 
his  scheme  is  characterized  by  the  French  tendency  of  reliance 
upon  government  to  do  for  the  people  what  they  despair  of 
doing  for  themselves,  very  justly  says  : 

' '  Nevertheless  it  marks  a  great  epoch  in  the  history  of  social 
reform  by  the  clearness  with'  which  it  pointed  out  three  principles 
ever  since  more  or  less  distinctly  felt  to  be  the  life  blood  of  co- 
operative efforts  :  first,  the  looking  to  the  association  of  workers 
carrying  on  their  accustomed  work  in  common  as  the  true  means  of 
raising  their  social  condition  thuough  the  use  of  the  profits  arising 
from  their  work ;  second,  the  restricting  the  payment  of  capital  to  a 
fixed  rate  of  interest,  and  giving  the  capitalist  security  for  his  cap- 
ital in  lieu  of  profit ;  third,  the  elimination  of  the  ruinous  effects  of 
competition,  and  the  substitution  of  a  healthy  emulation  in  its  place, 
by  the  union  of  different  establishments  carrying  on  the  same  in- 
dustry by  common  centres  by  means  of  which  diverse  industries 
may  also  be  united.  Thus,  setting  aside  ths  arbitrary  rule  of  an 
absolute  equality  of  salaries,  which  experience  has  not  justified 
where  the  attempt  to  act  upon  it  has  been  tried,  and  which  seems 
to  err  as  much  by  sacrificing  the  individual  to  the  body  as  the  pres- 
ent inequality  of  payment  errs  in  sacrificing  the  body  to  the  indi- 
vidual,—  this  organisation  du  travail  may  still  be  regarded  as  the 
prolific  egg  out  of  which  the  ideas  of  co-operation  sprang  in  France, 
and  which  has  had  no  inconsiderable  influence  on  the  ideas  of  co- 
operators  in  England." 

Our  review  has  now  brought  us  to  the  date  of  an  important 
event  in  the  history  of  co-operation  in  England.  The  experi- 
ments in  communistic  co-operation  had  practically  failed.  A 
few  stores,  principally  upon  the  joint  stock  plan,  still  remained, 
but  there  was  no  cohesive  force  binding  them  together.  There 

O  O 

was,  however,  considerable  co-operative  sentiment  existing  in 
the  country,  waiting  a  favorable  moment  to  spring  into  activity. 
Not  entirely  unfamiliar  with  the  theory  of  co-operation  were 
the  weavers  of  Rochdale,  28  of  whom,  massing  their  meagre 
capital  of  £1  each,  were  to  engage  in  a  scheme  of  co-operative 
distribution  upon  a  plan  so  practical  and  with  an  energy  so 


14  A  MANUAL  OF 

determined  as  to  carry  the  assurance  of  success.  Under  the 
name  of  "The  Rochdale  Pioneers,"  these  weavers  secured 
quarters  in  an  old  weavers'  shop  in  Toad  Lane,  Rochdale,  and, 
with  the  limited  stock  of  groceries  purchasable  with  their  united 
capital  of  £28,  began  business  in  1844.  The  insignificant  char- 
acter of  their  enterprise  provoked  the  ridicule  of  the  public. 

' '  When  the  day  and  hour  for  commencing  business  arrived  the 
little  party  assembled  within  to  take  part  in  the  ceremony  were 
abashed  at  the  largeness  of  the  crowd  assembled  to  witness  it. 
Some  delay  took  place  before  any  one  could  muster  up  courage  to 
take  down  the  shutters,  and  when  at  last  the  '  store '  and  its  con- 
tents were  exposed  to  public  view,  all  Toad  Lane  was  in  a  roar. 
Loud  and  long  were  the  shouts  of  derision  that  rose  from  a  host  of 
4  doffers,'  a  species  of  street  boy  peculiar  to  the  clothing  districts, 
who,  set  on  by  persons  who  ought  to  have  known  better,  stared 
through  the  windows  or  blocked  up  the  doorway,  evincing  their 
characteristically  precocious  sense  of  the  ridiculous  by  the  nature 
of  their  comments  on  the  modest  display  of  the  '  owd  weavers' 
shop/"* 

But  success,  instant  and  unmistakable,  overcame  ridicule. 
Not  long  were  these  28  weavers  left  unsupported  in  their 
effort  to  supply  themselves  with  groceries  free  from  the  adul- 
terations and  imperfections  found  in  those  furnished  at  the 
ordinary  shops,  and,  at  the  same  time,  divide  among  them- 
selves the  profits  accruing  from  their  sale.  A  scheme  so 
practical,  conferring  benefits  so  great,  at  once  attracted  new 
members.  The  next  year  the  association  numbered  74,  and 
the  joint  capital  rose  to  £181.  The  whole  story  of  their 
progress  is  most  eloquently  told  by  statistics,  and  we  there- 
fore present  it  in  that  form,  availing  ourselves  of  the  follow- 
ing table  :  f 

*  W.  T.  Thornton.    On  Labour,  page  376. 

f  Reproduced  from  "  On  Labour,"  Thornton,  page  377. 


DISTRIBUTIVE  CO-OPERATION. 


15 


Statistics  of  the  Rochdale  Equitable  Pioneers. 


YEAR. 

No.  of 
Members. 

Funds. 

Business 
done. 

Profits. 

£ 

£ 

£ 

1844 

28 

28 

- 

- 

1845 

74 

181 

710 

22 

1846 

80 

252 

1,146 

80 

1847 

110 

286 

1,924 

72 

1848 

140 

397 

2,276 

117 

1849 

390 

1,193 

6,611 

561 

1850 

600 

2,299 

13,179 

880 

1851 

&30 

2,785 

17,638 

990 

1852 

680 

3,471 

16,352 

1,206 

1853 

720 

5,848 

22,760 

1,674 

1854 

900 

7,172 

33,364 

1,763 

1855 

1,400 

11,032 

44,902 

3,106 

1866 

1,600 

12,920 

63,197 

3,921 

1857 

1,850 

15,142 

79,788 

5,470 

1858 

1,950 

18,160 

71,680 

6,284 

1859 

2,703 

27,060 

104,012 

10,739 

1860 

3,450 

37,710 

152,063 

15,906 

1861 

3,900 

42,925 

176,206 

18,020 

1862 

3,501 

38,465 

141,074 

17,564 

1863 

4,013 

49,361 

158,632 

19,671 

1864 

4,747 

62,105 

174,937 

22,717 

1865 

5,326 

78,778 

196,234 

25,156 

1866 

6,246 

99,989 

249,122 

31,931 

1867 

6,823 

128,435 

284,910 

41,619 

Not  only  did  the  business  expand  financially  but  its  scope 
was  broadened.  The  original  stock  in  trade  was  confined  to 
the  leading  staple  groceries,  such  as  flour,  oatmeal,  sugar,  and 
butter.  The  following  table  shows  the  departments  afterward 
added  and  the  date  of  opening  each : 


DEPARTMENTS. 

Date  of 
opening. 

Linen  and  woollen  drapery,     ..;.... 

1847 
1850 

Shoe  and  clog  making,    ........ 
Tailorino*,          .......... 

1852 
1852 

Coal  dealing,    .......... 
Baking,     ........... 

1867 

Ten  or  more  branch  stores  are  now  carried  on  in  the  town  of 


16  A  MANUAL  OF 

Rochdale,  and  extensive  premises  owned  by  the  association 
have  taken  the  place  of  the  old  weavers'  shop  of  1844. 

From  the  first,  part  of  the  profits  were  set  aside  for  educa- 
tional purposes,  and  an  extensive  library  and  liberally  equipped 
reading  room  are  now  maintained. 

The  following  statement  exhibits  the  condition  of  the  asso- 
ciation in  1884,  and  when  contrasted  with  its  humble  origin  is 
itself  a  striking  justification  of  the  principles  upon  which  the 
business  has  been  managed  : 

Members. 
Number  of  members,  December  31,  1884, 11,161 

Liabilities. 

Share  capital,  December  31, 1884 £329,470 

Loan  capital,  December  31,  1884, £14,561 

Reserve  fund,  December  31,  1884, £2,605 

Assets. 

Value  of  saleable  stock,  December  31,  1884,  ....  £28,593 
Value  of  land  and  buildings  and  fixed  stock,  December  31, 

1884, £53,442 

Investments,  December  31,  1884, £242,432 

Trade  and  Profits. 

Received  for  goods  sold  during  1884,    ....                 .  £262,270 

Total  net  profit  made  during  1884, £36,992 

Average  dividend  paid  per  £, 2s.  9f  d. 

Applied  to  educational  purposes  during  1884,       ....  £920 

Applied  to  charitable  purposes  during  1884,          .        .        .         .  £118 

Subscriptions  to  Central  Board, £46  Os.  lOd. 

The  Rochdale  store  was  not  the  first  to  engage  in  co-opera- 
tive trade,  as  we  have  already  shown,  nor  was  it  the  first  to 
divide  profits  on  sales.  But  whether  the  time  was  more  pro- 
pitious or  the  character  of  its  founders  more  favorable  to  suc- 
cess, it  became,  unlike  its  predecessors,  true  to  its  name,  the 
pioneer  of  the  distributive  associations  now  numbered  by  hun- 
dreds in  Great  Britain.  Unlike  the  joint  stock  companies  the 
cardinal  principles  of  co-operative  distribution  were  observed 
by  them  :  — All  profits  to  be  divided  on  purchases*  and  all  pur- 
chasing members  to  be  made  shareholders  with  a  fixed  interest 
on  the  capital  invested.  The  cash  system  to  be  strictly  adhered 
to. 


DISTRIBUTIVE  CO-OPERATION.  17 

A  single  paragraph  by  Holyoake  gives  a  synopsis  of  the  early 
and  later  phases  of  co-operation  in  Great  Britain,  and  shows 
the  trend  of  co-operative  endeavor  after  the  year  1844.  He 
says : 

"The  term  co-operation  was  at  first,  as  the  reader  sees,  used  in 
the  sense  of  communism,  as  denoting  a  general  arrangement  of 
society  for  the  mutual  benefit  of  all  concerned  in  sustaining  it. 
Later,  the  term  co-operation  came  to  be  restricted  to  the  humbler 
occupations  of  buying  and  selling  provisions."* 

The  germ  planted  at  Rochdale  was  not  long  in  developing. 

u  It  was  not,  however,  till  the  great  revolutionary  crisis  of  1848-9 
that  any  strong  impulse  was  given  to  co-operation  in  England. 
*  *  *  Co-operation  at  this  time  took  a  start  (in  the  north  of 
England)  as  noteworthy,  and  more  permanent  in  its  results,  than 
the  famous  Parisian  movement,  which,  after  surviving  the  barri- 
cades, withered  in  the  first  year  of  the  second  empire. 

"  The  stores  in  Lancashire  and  Yorkshire  rose  rapidly  from  units 
to  tens,  from  tens  to  hundreds.  The  need  of  some  sort  of  federa- 
tion began  to  be  felt,  and  conferences  of  neighboring  societies  to  be 
held  in  different  localities  to  consider  questions  of  organization  and 
joint  action.  For,  as  the  societies  grew  in  number  and  importance, 
and  their  trade  began  to  extend  beyond  the  supply  of  the  simplest 
necessities  of  life,  the  state  of  the  law  was  found  to  press  very 
severely  upon  them.  They  were  hampered  at  every  turn,  and  found 
themselves  going  into  action,  as  it  were,  in  the  great  struggle  for 
existence,  not  as  men  in  proof  armor,  but  as  men  in  fetters."  | 

The  remedy  was  at  hand.  Workingmen  throughout  Eng- 
land were  seeking  through  legislation  to  obtain  wider  oppor- 
tunities and  the  freedom  of  action  that  had  been  denied  them. 
The  years  1844,  1846,  and  1847  witnessed  the  passage  of  im- 
portant statutes  affecting  factory  administration,  the  hours  of 
labor,  and  the  formation  of  friendly  and  trade  societies,  and 
saw,  also,  the  repeal  of  the  corn  laws.  The  progress  of  the 
working  classes  was  once  more  under  discussion  and  their  con- 
dition grew  brighter  day  by  day.  And  now  Mr.  Frederic 

*  History  of  Co-operation,  Vol.  I.,  page  68. 

t  Thomas  Hughes.     Lecture  on  the  History  and  Objects  of    Co-operation    (Co- 
operative Board  Pamphlets),  page  7. 


18  A  MANUAL  OF 

Maurice,  with  others  attracted  by  his  energy  and  enthusiasm, 
came  forward  in  aid  of  the  co-operative  movement.  It  was 
fortunate  that  when  the  need  of  favorable  legislation  was  most 
pressing  the  influence  of  Maurice  was  enlisted.  For  he,  from 
his  position  as  reader  at  Lincoln's  Inn,  was  able  to  interest 
many  young  and  ardent  lawyers,  members  of  his  congregation, 
in  the  progress  of  the  working  classes,  and  to  impart  to  them 
his  own  firm  conviction  that  co-operation  was  to  be  an  impor- 
tant element  in  that  progress. 

In  1850  a  society  for  promoting  workingmen's  associations 
was  formed,  Mr.  Maurice  being  at  its  head.  Co-operation  it 
declared  to  be  "  the  practical  application  of  Christianity  to  the 
purposes  of  trade  and  industry."  This  society  became  an  active 
force  in  behalf  of  the  co-operative  movement  in  the  practical  di- 
rection it  had  now  taken.  Attracting  to  itself  many  co-operators 
of  the  Owen  school  and  numbering  among  its  members,  besides 
Maurice,  such  men  as  the  late  Canon  Kingsley,  J.  M.  Ludlow, 
and  E.  V.  Neale,*  its  attention  was  immediately  devoted  to 
securing  the  needed  reform  in  law  so  as  properly  to  guard  and 
foster  co-operative  societies. 

The  first  act  affording  an  adequate  legal  basis  for  such  societies 
was  passed  in  1852,  15  Victoria,  31.  The  efforts  put  forth  to 
secure  this  legislation  drew  together  those  engaged  in  co-opera- 
tion throughout  Great  Britain.  It  is  estimated  that  at  the  time 
of  its  passage  about  140  co-operative  stores  were  in  existence. 
The  society  under  Maurice's  administration  became  a  sort  of 
working  co-operative  centre,  and  in  its  hall,  July  26,  1852,  was 
held  a  conference  of  delegates  from  the  provincial  societies,  at 
which  the  new  law  was  discussed,  the  establishment  of  a  whole- 
sale supply  depot  considered,  the  need  of  a  newspaper  organ 
debated,  and  other  important  matters  brought  forward.  The 
first  four  years'  work  under  the  leadership  of  the  London  society 
is  thus  summarized  by  Mr.  Hughes  : 

"  Co-operative  societies  had  been  legalized  for  all  purposes,  except 
dealing  with  land  and  banking.  The  moral  side  of  the  movement 

*  Now  Secretary  to  the  Central  Co-operative  Board.  Mr.  Ludlow  is  now  Registrar  of 
Friendly  Societies.  The  members  of  this  society  were  known  as  Christian  Communists 
or  Christian  Socialists.  In  Parliament,  Messrs.  Walter  Morrison,  Thomas  Hughes,  and 
Messrs.  Slaney,  Henley,  and  others  rendered  material  aid  to  the  society  in  its  efforts  to 
secure  legislation. 


DISTRIBUTIVE  CO-OPERATION.  19 

had  been  brought  into  prominence,  and  principles  had  been  accepted 
as  essential,  and  incorporated  into  the  constitution  and  rules  of  the 
societies,  which  have  retained  their  hold,  and  are  to  this  day  appealed 
to  as  fundamental.  And  lastly,  the  necessity  for  closer  union  between 
the  societies  had  been  demonstrated  and  considerable  advances  made 
towards  its  attainment." 

In  1857,  Mr.  Holyoake  published  his  "  History  of  Co-opera- 
tion in  Rochdale,"  a  work  which  was  widely  read,  and  thus  ex- 
erted an  important  educational  influence  in  behalf  of  co-operative 
progress. 

In  1862  the  number  of  societies  in  Great  Britain  was  esti- 
mated at  450  ;  their  estimated  membership  being  90,000  ;  their 
share  and  loan  capital,  £450,000;  their  annual  sales,  £2,350,- 
000  ;  and  their  profits,  <£166,000.  In  this  year  parliamentary 
returns  were  first  made  to  the  Registrar,  and  thereafter  annual 
statistical  statements  were  presented. 

The  Industrial  and  Provident  Societies  Act  of  1862  gave  co- 
operative societies  a  corporate  existence,  and  permitted  one 
society  to  hold  shares  in  another.  This  gave  the  requisite  legal 
basis  for  the  formation  of  co-operative  wholesale  societies,  which 
are  federative  associations,  their  capital  being  in  shares  held 
by  the  societies  composing  the  federation.  Such  an  institution 
had  long  been  needed  to  render  the  independence  of  the  retail 
stores  more  complete,  to  allow  them  to  disregard  the  jealousy 
of  rival  traders  who  exerted  their  influence  against  them  with 
private  wholesale  dealers,  to  enable  them  to  secure  supplies  of 
undoubted  purity,  and,  while  utilizing  the  surplus  capital  accu- 
mulating in  their  hands,  to  permit  them  to  save  to  themselves 
the  profit  arising  in  the  wholesale  trade. 

After  much  discussion  the  English  Co-operative  Wholesale 
was  established  in  1864,  with  a  capital  of  ,£999,  which  was  soon 
largely  increased.  Attempts  at  wholesale  co-operative  distribu- 
tion had  previously  been  made,  but  never  upon  the  broad  plan 
now  adopted.  Such  attempts  had  failed.  The  scheme  now  de- 
vised was  perfectly  logical.  It  was  in  principle  simply  an 
extension  of  the  plan  upon  which  the  retail  business  had  been 
conducted.  The  relation  of  the  retail  societies  to  the  whole- 
sale is  exactly  analagous  to  the  relation  existing  between  indi- 
vidual members  and  the  retail,  and  will  be  more  fully  explained 
hereafter.  We  are  now  dealing  with  the  history  rather  than 


20  A  MANUAL  OF 

the  economics  of  the  movement.  The  Scottish  wholesale  was 
founded  in  1868.  The  formation  of  these  wholesale  societies 
marks  an  epoch  in  the  progress  of  co-operation,  and  established 
the  commercial  autonomy  of  the  co-operative  organization. 

From  time  to  time  experiments  in  co-operative  production 
were  made,  which,  in  accordance  with  our  plan,  we  shall  here 
disregard,  presenting  their  salient  points  later,  and  for  the 
present  confine  ourselves  to  co-operative  distribution. 

In  1869  a  central  co-operative  board  was  formed  and  annual 
congresses  composed  of  delegates  from  the  societies  represented 
in  the  board  have  since  been  held.  The  Central  Board  at  first 
consisted  of  two  sections,  the  London  and  the  provincial,  but 
was  afterwards  organized  as  a  Union  composed  of  representa- 
tives from  six  districts  or  sections,  and  sustained  by  annual 
subscriptions  from  the  societies.  This  Union,  in  conjunction 
with  the  congresses,  exerts  a  strong  cohesive  force  upon  the 
societies,  and  also  becomes  an  efficient  agent  in  propagandism. 
To  operate  especially  in  the  latter  direction  the  Southern  Co- 
operative Guild,  having  its  headquarters  in  London,  was  formed 
in  1877. 

The  unity  of  action  secured  among  co-operators  by  the 
organization  described  proved  of  the  utmost  value.  The  annual 
discussion  in  the  Congresses  of  matters  of  peculiar  interest, 
and  the  union  of  delegates  from  sections  widely  separated  but 
engaged  in  the  same  work  and  actuated  by  similar  motives, 
gave  the  movement  a  vitality  it  previously  lacked  and  materially 
aided  its  growth  and  prosperity. 

Since  1860  a  newspaper  organ  of  co-operation  has  been  main- 
tained. This  is  now  owned  by  the  societies. 

Before  closing  this  historical  review  it  is  proper  to  notice  a 
distinct  branch  of  co-operative  distribution  in  Great  Britain,  — 
.that  conducted  by  societies  on  the  so-called  civil  service  plan. 
There  are  several  of  these,  the  largest  in  point  of  sales  being 
the  Civil  Service  Supply  Association,  and  the  Army  and  Navy 
Society,  of  London,  the  latter  differing  only  in  having  been 
founded  by  officers  of  the  army  and  navy  instead  of  by  em- 
ployes in  the  civil  service. 

In  reality  these  societies  are  consumers'  joint  stock  distribut- 
ing agencies,  dividing  no  profits  on  purchases,  and  selling,  not 
at  the  ruling  market  rates,  as  do  the  stores  on  the  Rochdale 


DISTRIBUTIVE  CO-OPERATION.  21 

plan,  but  at  the  lowest  prices  consistent  with  the  payment  of 
expenses  arid  a  fair  interest  on  capital  invested. 

The  first  association  on  this  plan  was  formed  in  1866,  and 
the  movement,  originated  by  government  employes  for  their 
mutual  benefit,  has  made  rapid  progress. 

The  trade  of'  these  associations  is  not  confined  to  share- 
holders, although  profits  are  divided  only  on  shares  in  the  form 
of  interest  on  capital  invested,  nor  do  they  attract  the  trade  of 
workingmen.  They  conduct  a  very  extensive  business  at  a  low 
expenditure  for  expenses,  and  are  of  great  benefit  to  the  classes 
supporting  them.  The  volume  of  their  trade  has  been  esti- 
mated to  bear  a  similar  relation  to  their  members'  income  that 
the  trade  of  the  working  class  societies  bears  to  their  members' 
income.  Co-operation  in  London  is  confined  to  these  societies, 
except  in  a  few  outlying  districts  inhabited  by  workingmen. 

The  growth  of  the  civil  service  societies  was  stimulated  by 
the  success  of  the  stores  established  on  the  Rochdale  plan,  and 
while  they  have  not  adopted  some  of  its  vital  features,  and 
have  confined  themselves  to  cheap  buying  and  selling  on  the 
joint  stock  rather  than  the  co-operative  basis,  they  still  have 
interests  in  common  with  the  workingmen  co-operators,  and 
three  of  these  societies  have  joined  the  Co-operative  Union. 
The  essential  difference  between  them  and  the  great  body  of 
workingmen's  societies  will  appear  in  our  subsequent  analysis. 
As  part  of  the  general  movement  their  work  cannot  be  over- 
looked in  this  review. 

Speaking  of  the  progress  of  co-operation  since  1824  it  has 
been  said : 

"  The  record  of  these  sixty  years  of  co-operative  work  is  a 
record  of  work  done  under  the  influence  of  many  different  motives  ; 
but  if  it  could  be  written  out  in  full,  it  must  contain  the  names  of 
many  unselfish  and  earnest  men,  whose  names  were  never  knywn 
beyond  their  own  town,  and  even  there  may  now  have  been  for- 
gotten. In  the  earlier  days  men  were  fettered  by  laws  which  pre- 
vented their  combined  action,  and  there  was  little  to  protect  them 
against  fraud.  There  were  taxes  on  newspapers,  few  even  decent 
schools,  no  co-operative  manuals  or  literature.  Now  all  this  is 
changed."  * 

*  Workingmen  Co-operators,  page  30. 


22  A  MANUAL  OF 

To  which  it  may  be  added  that  whereas  in  the  early  days  the 
theoretical  or  ideal  side  of  co-operation  was  presented  and  the 
practical  insufficiently  studied,  it  was  only  after  co-operators 
set  themselves  squarely  at  work  upon  the  practical  side  of  the 
problem,  availing  themselves  of  the  avenues  easily  open  to 
them,  and  gradually  pushing  out  into  wider  fields  of  endeavor 
as  one  obstacle  after  another  was  overcome,  that  success  was 
won.  To-day  while  the  ideal  is  not  forgotten  and  leading  co- 
operators  still  look  forward  to  heights  yet  unattained  and  to 
the  entire  reorganization  of  all  industry  upon  the  co-operative 
basis,  still  the  effort  appears  to  be  to  accomplish  this  through 
the  gradual  expansion  of  the  co-operative  organization  along 
lines  proved  by  experience  to  be  safe,  and  not  by  any  sudden 
or  radical  change  in  the  structure  of  society.  The  co-opera- 
tion of  the  present,  as  represented  in  the  discussions  of  the 
congresses,  is  conservative  as  well  as  hopeful,  practical  rather 
than  ideal,  and  while  full  of  faith  in  the  future  is  inclined  to 
build  upon  sure  foundations  a  structure  whose  stability  is 
definitely  assured. 

THE  FOUNDATION  IN  LAW. 

The  legal  basis  of  co-operation  in  the  United  Kingdom  rests 
at  present  upon  the  following  statutes  now  in  force  :  The  In- 
dustrial and  Provident  Societies  Act  of  1876  ;  the  Customs  and 
Inland  Revenue  Act  of  1880 ;  and  the  Provident  Nominations 
and  Small  Intestacies  Act  of  1883. 

These  Acts  contain  provisions  for  the  formation  of  co-opera- 
tive societies ;  set  forth  the  rights  of  such  societies,  and  the 
rights  of  their  members ;  and  prescribe  the  duties  to  be  per- 
formed by  the  societies. 

It  is  required  that  in  the  formation  of  a  society  application 
shall  be  made  to  the  registrar  appointed  by  the  government. 
A  separate  registrar  is  provided  for  England  and  Wales,  for 
Scotland,  and  for  Ireland.  Blank  forms  of  application  are 
furnished,  specifying  twenty  distinct  matters  relating  to  the 
conduct  of  the  society's  business,  which  must  be  incorporated 
in  its  rules,  two  copies  of  which  signed  by  seven  persons  and 
the  secretary,  who  are  also  to  sign  the  application,  must  be 
forwarded  with  the  latter  to  the  registrar. 


DISTRIBUTIVE  CO-OPERATION.  23 

After  registration  the  society  becomes  a  body  corporate,  may 
sue  and  be  sued,  and  may  hold  and  deal  with  any  kind  of  prop- 
erty, including  shares  in  other  societies  and  companies  and 
real  estate  to  any  amount. 

The  rules  of  a  society  bind  its  members,  notwithstanding 
they  may  have  signed  no  assent  to  them.  The  rules  may  be 
amended  in  the  manner  originally  provided  for  such  amend- 
ment, but  any  amended  rule  must  be  registered.  Application 
for  such  registration  must  be  made  upon  a  form  supplied  by  the 
registrar,  and  a  fee  of  10s.  is  charged. 

A  society  may  sue  its  members.  It  may  make  a  contract, 
and  a  contract  made  by  it  is  binding  as  if  similarly  made  by  an 
individual,  and  when  made  under  its  seal,  or  by  a  writing 
executed  by  a  person  authorized  to  sign  in  its  behalf,  or 
verbally  by  one  duly  authorized  to  speak  for  the  society. 

Any  or  all  of  its  shares  may  be  made  withdrawable.  It  may 
carry  on  any  trade,  except  banking,  including  trade  in  real 
estate.  It  may  apply  its  profits  in  accordance  with  the  pro- 
visions contained  in  its  rules. 

It  may,  if  the  rules  so  provide,  receive  money  on  loan  from 
any  one,  to  an  amount  limited  by  its  rules,  or  it  may  accept 
deposits,  limited  to  5s.  in  any  payment,  and  to  £20  for  any 
depositor,  payable  at  not  less  than  two  days'  notice. 

It  may  also,  if  its  share  capital  is  not  withdrawable,  carry 
on  the  business  of  banking. 

It  may  make  loans  to  members  on  real  or  personal  security. 
It  may  also  invest  on  the  security  of  other  societies  or  com- 
panies, save  those  only  where  liability  is  unlimited. 

It  is  exempt  from  the  payment  of  income  tax  on  profits, 
provided  the  number  of  its  shares  is  not  limited  by  its  rules  or 
practice. 

It  may,  by  procedure  duly  set  forth  in  the  Act,  unite  with 
any  other  society,  or  may  acquire  the  business  of  any  such 
society,  or  may  change  its  organization  into  that  of  a  company. 

It  may  provide  the  mode  of  settlement  of  disputes  that  may 
arise  between  itself  and  its  officers  or  members. 

A  society  may  dissolve  itself  by  an  instrument  signed  by 
three-fourths  of  its  members,  or  dissolution  may  be  effected  by 
a  three-fourths  vote  at  a  general  meeting  called  for  the  special 
purpose.  If  such  dissolution  be  voluntary  the  resolution  must 


24  A  MANUAL  OF 

be  confirmed  at  a  second  meeting,  but  if  on  account  of  debts, 
the  action  of  the  first  meeting  is  sufficient.^ 

If  the  society  is  in  dissolution  on  account  of  debt,  hostile 
proceedings  to  seize  the  property  may  be  stayed. 

Minors,  if  not  under  the  age  of  16,  may  become  members, 
and  may  act  as  if  of  full  age,  but  cannot  hold  office. 

Members  are  not  liable  individually  for  the  society's  debts, 
and  their  liability  in  any  event  is  limited  to  the  amount  remain- 
ing unpaid  on  shares  legally  theirs,  or  which  they  have  agreed 
to  take.  They  are  not  liable  for  debts  contracted  subsequent 
to  transfer  or  withdrawal  of  the  shares  held  by  them ;  nor  for 
debts  existing  at  date  of  such  transfer  or  withdrawal,  unless 
the  other  assets  are  insufficient  to  meet  the  liabilities  of  the 
society. 

The  number  of  shares  permitted  to  be  held  by  an  individual 
or  company  may  be  fixed  by  the  rules  but  must  not  exceed  in 
the  total  the  nominal  value  of  £200.  The  number  of  shares 
permitted  to  be  held  by  a  society  is  unlimited,  and  likewise 
there  is  no  limit  to  the  amount  which  may  be  received  as  a 
loan  from  an  individual  or  company,  except  the  limit,  if  any, 
fixed  by  the  rules. 

A  member  may  by  instrument  duly  recorded  nominate  the 
persons  who  shall  take  his  investment  in  the  society  at  his 
death,  provided  at  the  latter  event  this  investment  in  loans, 
deposits,  or  shares  does  not  exceed  £100,  and  a  nomination 
may  be  varied  or  revoked.  If  no  nomination  subsists  in  the 
event  of  a  member  dying  intestate,  the  committee  of  manage- 
ment become  administrators  of  the  fund. 

Whenever  upon  the  death  of  a  member  his  investment  exceeds 
£80  the  Commissioners  of  Inland  Revenue  are  to  be  notified. 

Upon  application  to  the  registrar  members  may  secure  an 
official  investigation  into  the  affairs  of  the  society. 

Every  society  must  have  a  registered  office  with  its  name 
conspicuously  displayed  outside.  A  change  of  location  must 
be  at  once  reported  to  the  registrar.  It  must  have  an  en- 
graved seal  bearing  its  name,  must  have  its  accounts  audited 
at  least  annually,  and  a  copy  of  its  last  balance  sheet  and 
auditors'  report  must  be  constantly  displayed  in  its  office.  An- 
nual returns  of  its  affairs  must  be.  made  to  the  registrar,  and  a 
copy  furnished,  when  applied  for,  to  all  interested  parties. 


DISTRIBUTIVE  CO-OPERATION.  25 

Its  books  may  at  any  time  be  inspected  by  any  one  interested 
in  its  funds. 

Special  returns  are  required  if  the  society  conducts  a  bank- 
ing business. 

Copies  of  its  rules  must  be  supplied  by  every  society  to  any 
applicant,  at  a  price  not  more  than  one  shilling. 

The  duties  set  forth  in  the  act  must  be  performed  by  the 
society  under  penalties.  These  penalties  affect  the  society  and 
its  officers  and  vary  from  £1  to  £50,  and  are  in  some  cases 
cumulative  during  the  time  the  neglect  continues. 

THE  RETAIL   STORE. 

The  unit  of  the  co-eperative  organization  is  the  retail  store. 
In  starting  such  a  store  in  a  new  district  in  Great  Britain  it  is 
considered  desirable  to  make  use  of  the  advice  of  the  Co-opera- 
tive Union.  At  the  present  day  its  work  has  become  so  sys- 
tematized through  experience  that  its  help  is  of  great  benefit  to 
the  unpracticed  co-operator.  It  has  prepared  model  rules  for 
the  administration  of  co-operative  societies  which  are  in  har- 
mony with  the  requirements  of  the  English  law,  and  it  is  ready 
at  all  times  to  aid  every  new  enterprise  by  showing  those  in- 
terested every  thing  essential  to  the  successful  establishment  of 
a  store. 

FIRST  STEPS. 

In  the  first  place,  after  a  few  persons  have  become  im- 
pressed with  the  advantages  of  co-operative  distribution,  and 
have  determined  to  found  a  society,  a  meeting  is  usually  held 
to  awaken  public  interest  and  to  secure  members.  Speakers 
may  be  obtained  from  the  Co-operative  Union  or  from  the 
Southern  Co-operative  Guild.  The  advantages  of  co-opera- 
tion are  explained  and  every  effort  made  to  stimulate  interest 
in  the  movement.  An  informal  organization  is  effected,  col- 
lectors appointed,  and  the  work  of  securing  the  required 
capital  begins. 

CAPITAL. 

The  co-operative  scheme  rests  on  the  basis  of  cash  payments. 
The  outfit  and  goods  are  bought  for  cash  and  no  sales  on  credit 
ought  to  be  allowed.  Considerable  capital,  therefore,  must  be 
paid  in  before  the  store  opens.  The  amount  to  be  raised  and 


26  A  MANUAL  OF 

the  number  of  members  to  be  secured  before  business  is  begun 
will  depend  on  circumstances.  It  is  considered  that  100  mem- 
bers, with  £130  capital,  and  a  guaranteed  trade  of  from  £40 
to  £50  per  week  are  required  to  ensure  expenses  and  a  divi- 
dend if  the  store  is  to  be  constantly  open.  But  the  beginning 
may  be  much  more  humble.  The  store  may  be  open  only  at 
certain  times,  for  instance,  evenings,  or  on  particular  days  in 
the  week,  thus  reducing  the  expense  of  a  storekeeper  by  em- 
ploying only  a  portion  of  his  time.  A  member  who  is  other- 
wise employed  may,  if  capable,  serve  as  storekeeper  in  the 
evening,  or  a  member's  wife  may  be  selected  for  the  position. 
It  is  deemed  essential  that,  however  established,  the  store 
should  depend  for  its  prosperity  on  the  support  of  actual  mem- 
bers, and  not  rely  upon  loans  or  gifts  from  those  who  may  have 
a  sentimental  interest  in  the  scheme.  The  trade  of  some  mem- 
bers may  at  first  be  limited.  If  in  debt  to  private  traders  they 
cannot  at  once  transfer  their  entire  patronage  to  the  co-opera- 
tive store.  Slowly  they  may  by  economy  extinguish  their 
debt  and  increase  their  trade.  An  independent  beginning  of 
the  store,  no  matter  how  humble,  and  a  gradual  expansion  as 
business  increases  is  always  advised. 

SHARES. 

The  number  of  shares  held  by  each  member  may  be  not  less 
than  one  nor  more  than  200,  the  value  of  each  share  being  £1. 
A  fixed  rate  of  interest  is  paid  on  capital  invested,  usually  five 
per  cent,  and  members  are  encouraged  to  leave  undrawn  the 
dividends  accruing  on  their  purchases,  such  undrawn  dividends 
being  added  to  the  capital,  thus  permitting  an  increase  of  the 
business.  The  store  in  this  way  performs  the  functions  of  a 
savings  bank  of  deposit,  thrift  on  the  part  of  members  is  stim- 
ulated, and  while  on  one  hand  the  evils  of  debt  are  prevented 
by  adherence  to  the  rule  of  cash  payments,  on  the  other  mem- 
bers form  the  habit  of  saving,  by  the  inducement  offered  to 
allow  their  dividends  to  go  on  deposit  at  a  fair  rate  of  interest. 

NATURE  OF  SHARE  CAPITAL. 

To  determine  the  nature  of  the  share  capital,  that  is,  whether 
it  shall  be  withdrawable  or  only  transferable,  opens  an  import- 


DISTRIBUTIVE  CO-OPEKATION.  27 

ant  question  which  the  new  society  must  meet  and  settle.     Its 
bearings  are  considered  in  the  following : 

"  In  the  general  rules  three  cases  are  provided  for:  —  first, 
where  all  the  shares  are  to  be  withdrawable ;  second,  where  they 
are  all  to  be  transferable  ;  third,  where  some  are  to  be  transferable 
and  some  withdrawable.  In  the  early  days  of  co-operative  societies 
the  law  compelled  them  to  make  their  shares  withdrawable.  The 
early  societies  were  accordingly  all  formed  on  this  principle  ;  and 
the  large  majority  of  those  formed  after  the  alteration  of  the  law, 
when  shares  were  allowed  to  be  made  transferable  in  the  case  of 
joint  stock  companies,  followed  the  example  of  their  predecessors. 
Cases,  however,  have  occurred  where  rumors  have  been  spread  as  to 
the  solvency  of  such  a  society ;  a  run  has  taken  place  upon  their 
funds,  the  more  selfish  members  seeking  to  secure  themselves  from 
sharing  in  any  loss,  careless  of  the  result  to  their  fellow  members ; 
and  the  society,  having  almost  all  its  capital  locked  up  in  buildings, 
fixed  stock  and  trading  stock,  has  had  to  stop  payment,  though  per- 
fectly solvent,  so  as  to  gain  time  to  realize  its  assets.  Some  of 
the  older  societies,  hampered  by  the  fact  of  their  members  hav- 
ing become  accustomed  to  withdrawable  shares,  have  met  this  dif- 
ficulty by  altering  their  rules,  and  making  a  portion  of  their  capital 
transferable. 

It  is,  however,  generally  considered  among  co-operators  that  in 
the  case  of  new  societies  it  is  much  the  best  plan  to  make  all  the 
capital  transferable.  To  meet  the  case  of  members  leaving  the 
locality,  or  wishing  to  draw  out  a  part  of  their  capital  in  order  to 
provide  for  any  given  expenditure,  as  in  the  case  of  illness,  you 
should  have  a  rule,  such  as  is  given  in  the  model  rules  above-men- 
tioned, enabling  the  committee  to  purchase  the  shares  of  members 
at  a  price  not  exceeding  their  par  value,  i.  e.,  the  sum  paid  up  on 
them.  In  this  manner  the  capital  becomes  in  fact  withdrawable, 
except  in  the  one  case  of  a  panic  as  to  the  financial  position  of  the 
society,  in  which  case  it  is  only  fair  that,  if  there  be  any  ground  for 
alarm,  all  the  members  should  share  equally  in  any  loss  sustained. 
You  may  also  very  well  have  a  rule  empowering  the  committee  to 
take  money  on  loan  from  members,  after  they  have  contributed  some 
definite  amount  to  the  share  capital,  to  be  withdrawable  on  demand, 
or  after  so  many  days'  notice,  according  to  the  amount  withdrawn."  * 

Many  co-operators  think  that  the  matter  is  best  settled  by 

*  Walter  Morrison,  Esq.     Village  Co-operative  Stores  (Co-operative  Board  Pamph- 
lets). 


28  A  MANUAL  OF 

making  every  member  have  one  non-withdrawable  transferable 
share  of  £1,  and  let  his  remaining  shares,  which  he  acquires 
through  undrawn  dividends  or  by  other  investments,  be  with- 
drawable. * 

PAYMENT  OF  SUBSCRIBED  CAPITAL. 

Not  all  the  money  subscribed  for  shares  need  be  paid  up  at 
once.  It  is  usual  to  make  payments  at  the  rate  of  3d.  per 
week.  In  some  societies  subscribers  do  not  acquire  full  mem- 
bership until  an  entire  share  or  even  several  shares  have  been 
paid  for  in  full.  In  general,  however,  after  a  shilling  has  been 
paid  in  members  are  allowed  to  have  full  privileges.  Con- 
cerning this  matter,  Mr.  Morrison,  in  the  pamphlet  already 
quoted,  says :  — 

u  Urge  your  members  to  pay  up  their  shares  in  full  if  they  can, 
in  order  to  simplify  your  accounts.  It  may  be  useful  to  this  end  to 
provide  a  special  rule  that  no  interest  will  be  allowed  on  any  sum 
under  £1,|  so  as  to  induce  a  member  who  may  have  £1  18s.  invested 
to  pay  up  the  balance  of  two  shillings  at  once.  You  should  also 
adopt  the  provision  in  the  general  rules  that  no.  dividend  on  pur- 
chases shall  be  paid  to  any  member  until  he  has  some  definite  sum, 
to  be  fixed  by  a  special  rule,  invested  in  the  share  capital ;  all  such 
dividends  being  credited  to  him  until  this  amount  is  made  up.  You 
will  require  an  average  capital  of  £10  per  member.  If  you  can  rely 
upon  the  richer  members  contributing  more  than  this  sum,  you  might 
fix  the  minimum  amount  which  each  member  must  invest  at  perhaps 
£5." 

KEGISTRATIOET. 

Before  beginning  business  the  society  must  be  registered  at 
the  government  registration  office  for  industrial  and  provident 
societies.  No  registration  fee  is  charged. 

THE  EXECUTIVE  COMMITTEE. 

The  selection  of  the  executive  committee  is  a  matter  of 
scarcely  less  importance  than  that  of  raising  the  required  capi- 
tal. This  committee  appoints  the  storekeeper  and  other  em- 
ployes, controls  the  purchase  of  the  stock  in  trade,  overlooks  the 
finances  of  the  society,  and  is,  in  fact,  entrusted  with  the  entire 
supervision  of  its  affairs.  The  nature  of  these  duties  suggests 

*  AVorkingmen  Co-operators,  page  36. 

t  Or,  more  explicitly,  on  any  fractional  part  of  a  £,  thus  supplying  a  motive  to  cause 
subscribed  capital  to  be  fully  paid  up. 


fUKlVERSITY)) 

DISTRIBUTIVE  CO-OPERATION. 

^4JlPO]^ 

the  care  that  ought  to  be  taken  in  selecting  the  men  who  are  to 
perform  them.  The  success  of  the  society  will  largely  depend 
on  the  efficiency  and  honesty  of  the  committee.  It  may  con- 
sist of  from  seven  to  twelve  members  who  are  usually  elected 
at  quarterly  meetings,  their  terms  of  office  being  so  arranged 
that  part  of  the  committee  goes  out  of  office  at  each  meeting, 
or  in  some  cases  semi-annually  or  annually,  although,  as  re- 
spects this,  many  societies  have  no  rule.  Members  of  the 
committee  may  or  may  not  be  eligible  to  re-election  imme- 
diately upon  the  expiration  of  their  terms  of  office.  Some- 
times it  is  provided  that  a  member  after  having  served  a  certain 
fixed  time  must  retire  for  an  interval  before  becoming  eligible 
again.  Generally  speaking,  experience  in  the  duties  of  the 
office  should  count  in  favor  of  the  retention  of  a  committee- 
man,  and  sweeping  changes  ought  to  be  discountenanced.  Of 
course  many  things  combine  to  determine  the  popularity  of  an 
officer  entrusted  with  the  management  of  a  society  in  which 
many  persons  have  a  keen  interest,  and  committees  cannot 
expect  immunity  from  the  adverse  criticism  which,  however 
undeserved,  sometimes  affects  this  popularity.  On  the  other 
hand,  members  who  desire  the  welfare  of  the  society  ought  to 
be  careful  that  grievances  of  ra  purely  personal  or  petty  nature 
do  not  blind  them  to  the  recognition  of  what  is,  on  the  whole, 
a  faithful  and  conservative  management  of  its  affairs.  Helpful 
criticism  i-s  always  to  be  desired,  and  adds  to  the  efficiency  of 
the  committee  and  promotes  the  society's  interests.  , 

The  President  of  the  society  is  sometimes  elected  by  the 
members  and  sometimes  by  the  committee.  The  Secretary  and 
Treasurer  by  the  latter.  Many  societies  dispense  with  a  trea- 
surer. Members  of  the  committee  are  usually  paid  a  small  fee 
for  attendance  at  the  weekly  business  meetings. 

"It  is  most  desirable,  in  fixing  the  scale  of  payment,  to  avoid 
the  likelihood  of  men  trying  to  get  on  to  the  committee  simply  for 
the  sake  of  the  fees.  This  is  a  danger  to  be  carefully  watched  in  the 
co-operative  movement.  The  work  of  its  managing  men  (not  its 
paid  officials,  to  whom  it  is  a  profession)  should  be  that  of  volun- 
teers, who  are  repaid  in  moderation  for  their  expense  or  trouble, 
and  who  will  withdraw  or  resign  their  position  at  once,  without  a 
moment's  hesitation,  on  the  score  of  money,  if  that  is  being  done 
of  which  they  so  strongly  disapprove  that  they  believe  this  to  be  the 


30  A  MANUAL  OF 

right  course.  Otherwise  they  are  not  independent,  and  may  tend  to 
get  into  the  hands  of  men  more  powerful  than  themselves,  who  are 
well  aware  that  they  will  not  resign  if  they  can  possibly  help  it. 
From  6d.  to  2s.  a  time  for  weekly  committee  meetings,  and  nothing 
for  sub-committees  or  adjourned  meetings,  is  a  common  rule  in  a 
moderate  sized  society."  * 

The  Secretary,  and  the  Treasurer,  if  there  be  one,  furnish 
security  to  the  society  for  the  proper  performance  of  their 
duties,  either  by  deposit  or  bond,  and  are  usually  paid  a  salary 
proportioned  to  the  labor  devolving  upon  them. 

BUSINESS  PREMISES. 

The  first  duties  which  demand  the  attention  of  the  committee 
will  be  the  selection  of  premises  in  which  to  conduct  the  busi- 
ness of  the  store  and  the  engagement  of  a  storekeeper.  As  to 
premises,  conditions  of  eligibility,  rental,  etc.,  will  affect  their 
decision.  The  aim,  of  course,  is  to  make  the  store  as  con- 
venient as  possible  to  the  majority  of  members.  If  the  begin- 
ning is  to  be  quite  humble  the  dwelling  house  of  a  member 
may  be  selected  as  headquarters,  and  more  extensive,  and  con- 
sequently more  expensive  quarters  taken  as  business  expands 
and  the  success  of  the  movement  becomes  assured. 

THE  STOREKEEPER. 

The  storekeeper  should  be  a  man  of  unquestioned  integrity 
and,  if  possible,  not  only  a  believer  in  co-operation  but  of  some 
experience  in  co-operative  trading.  Now  that  co-operative 
stores  have  multiplied  a  man  possessing  the  latter  qualification 
is  not  hard  to  find  if  the  committee  exercises  proper  care  and 
especially  if  the  aid  of  the  Co-operative  Union  is  sought.  It  is 
considered  undesirable  rather  than  otherwise  that  a  storekeeper 
has  been  trained  as  a  private  trader.  The  average  salary  of  a 
storekeeper  in  English  towns  is  about  25s.  or  30s.  a  week 
besides  rooms  and  gas ;  in  country  villages,  18s.  to  25s.  suf- 
fices. 

STORE  FITTINGS. 

The  fittings  of  the  store  are  of  the  usual  sort  common  to 
private  stores  of  the  same  grade.  The  Wholesale  Co-opera- 

*  Workingmen  Co-operators,  page  49. 


DISTRIBUTIVE  CO-OPERATION.  31 

tives  provide  these  if  required  at  a  lower  rate  than  they  can 
be  bought  for  elsewhere. 

STOCK  IN  TRADE. 

Premises  and  fittings  having  been  secured  and  a  storekeeper 
engaged,  a  stock  of  goods  must  be  purchased,  and  here  again, 
as  well  as  in  the  future  purchase  of  supplies,  the  judgment  of 
the  committee  will  be  put  to  the  test.  The  maxim  that  goods 
well  bought  are  half  sold  applies  to  co-operative  as  well  as  to 
ordinary  stores.  It  is  also  well  understood,  and  so  generally 
practiced  as  to  become  the  rule,  that  no  adulterated  or  inferior 
goods  are  to  be  allowed  upon  co-operative  counters.  No  credit, 
it  will  be  remembered,  is  to  be  given  purchasers,  and  stock  in 
trade  is  to  be  bought  for  cash  upon  the  best  terms. 

Experience  and  the  growth  of  the  co-operative  organization 
has  in  these  days  provided  helps  for  inexperienced  committees. 
The  wholesales  provide  lists  of  articles  such  as  are  proper  to 
provide  in  starting  a  store,  with  quantities  and  prices  of  each. 
The  Co-operative  Union  in  this  as  in  other  matters  of  detail 
is  ready  to  give  advice.  The  co-operative  literature  affords 
pamphlets  upon  the  subject  of  purchases.  Thus  the  path  of 
the  unpracticed  co-operator  is  not  entirely  dark  and  he  is  en- 
abled to  profit  by  the  wisdom  gained  by  his  predecessors  in 
their  unaided  efforts  during  the  earlier  years  of  the  co-operative 
movement. 

A  store  in  the  beginning  usually  confines  itself  to  the  staple 
articles  of  groceries,  and  increases  the  variety  of  its  stock  as 
the  demand  of  its  patrons  warrants.  Thus  to  ordinary  grocer- 
ies, hardware,  tinware,  crockery,  etc.,  may  first  be  added. 
Ready  made  boots  and  shoes,  dry  goods  of  the  staple  sorts, 
clothing,  hats,  caps,  etc.,  are  eventually  supplied.  As  to  the 
latter  articles  greater  care  and  experience  in  buying  are,  of 
course,  demanded,  so  as  to  avoid  loss  by  depreciation  owing  to 
change  of  fashion. 

In  some  instances  a  department  for  making  boots  to  measure 
and  others  for  custom  tailoring  and  millinery  have  been  suc- 
cessfully incorporated. 

A  bakery  forms  a  favorite  and  generally  profitable  branch  of 
English  co-operative  stores.  Many  fully  equipped  co-opera- 
tive bakeries  exist  as  departments  of  these  stores  and  do  a 


32  A  MANUAL  OF 

large  business.  Butchering,  also,  has  been  tried,  and  with 
some  profit,  but,  as  this  requires  greater  experience  and 
trained  judgment  on  the  part  of  the  buyers,  and  as  greater 
difficulty  has  been  found  in  procuring  efficient  department 
superintendents  in  this  line  than  in  the  others  mentioned,  it 
has  not  as  yet  been  found  equally  successful. 

The  sale  of  coal,  on  the  contrary,  is  common  and  profitable. 

As  to  the  advisability  of  conducting  several  departments 
under  one  management,  the  following  is  to  the  point,  and  the 
statistics  give  a  glimpse  at  what  has  been  accomplished : 

u  Speaking  generally,  '  make  one  department  a  success  at  a  time, 
keep  the  accounts  of  the  departments  separately,  and  publish  the 
profits  of  each  department  in  the  balance  sheet,'  would  be  the  advice 
of  many  co-operators.  The  number  of  the  chief  departments  car- 
ried on  by  societies  is  as  follows  :  1185  societies  do  business  in 
groceries  and  provisions  ;  772  in  drapery ;  715  in  boots  and  shoes ; 
333  in  coal;  211  in  butchery;  188  in  baking;  185  in  furnishing; 
137  in  hardware  ;  76  in  tailoring."  * 

In  making  purchases  the  normal  conditions  of  supply  and 
demand  should  be  strictly  considered  and,  as  a  rule,  all  specu- 
lative purchases  avoided. 

"  The  amount  of  stocks  should  usually  not  exceed  the  amount  of 
sales  for  three  or  four  weeks  in  groceries  ;  for  ten  to  fourteen  days 
in  provisions  ;  for  one  month  in  bakery ;  for  three  or  four  days  in 
butchery ;  for  ten  to  thirteen  weeks  in  drapery,  boots  and  shoes, 
and  furnishing."  f 

In  sales  the  ordinary  prices  of  the  locality  are  charged,  no 
attempt  being  made  to  undersell  private  traders.  It  is  not  in 
reduced  prices  but  in  division  of  profits  that  the  purchaser 
reaps  his  reward. 

THE  CHECK  SYSTEM. 

As  dividends  are  to  be  declared  on  purchases  arrangements 
must  be  made  for  registering  the  latter  and  enabling  each  cus- 
tomer to  prove  quickly  the  amount  of  his  purchases  in  order  to 
collect  his  share  of  profits.  This  is  accomplished  quite  simply 

*  "Workingmen  Co-operators,  page  68.  f  Ibid,  page  43. 


DISTRIBUTIVE  CO-OPERATION.  33 

by  giving  each  customer  a  check  or  token  either  of  metal  or 
paper  representing  in  amount  the  amount  of  his  purchase. 
These  are  retained  and  presented  at  the  end  of  the  quarter  to 
secure  payment  of  the  dividend.  Members  are  from  time  to 
time  during  the  quarter  required  to  exchange  tokens  of  small 
nominal  value  for  those  of  higher  denomination,  in  order  to 
reduce  the  number  of  tokens  of  small  denomination  required  in 
circulation  and  to  simplify  matters  generally. 

In  the  use  of  these  tokens  fraud  may  occur,  as,  for  instance, 
employes  have  been  known  to  purloin  them  and  afterward 
secure  their  presentation  through  an  accomplice  for  exchange. 
On  the  other  hand,  purchasers  have  held  them  back  for  pre- 
sentation during  a  quarter  subsequent  to  that  in  which  they 
were  issued,  and  when  the  dividend  happened  to  be  larger, 
thus  unfairly  sharing  in  a  larger  division  of  profits  than  was 
justly  their  right,  besides  disarranging  the  accounts  of  the 
society. 

The  paper  checks  may  be  so  made  as  to  guard  against  the 
latter  evil  by  changing  the  color  in  each  quarter,  but  the  paper 
checks  may  have  their  nominal  value  increased  by  fraudulent 
alteration  of  the  amounts  borne  upon  them. 

Great  care  is  needed  to  ensure  against  corrupt  use  of  the 
checks,  and  the  ideal  check  system  has  yet  to  be  devised. 

Various  methods  are  employed  to  check  the  operations  of  the 
manager  and  to  discover  the  amount  of  cash  passing  through  his 
hands.  The  system  of  dividend  tokens  just  described  affords  a 
partial  check,  but,  for  the  reasons  stated,  fraudulent  use  of  the 
tokens  may  render  this  sort  of  checking  nugatory,  and,  if  relied 
on,  cause  a  perfectly  honest  manager  to  be  unjustly  suspected. 
Among  other  plans  one  is  "giving  the  customer  a  ticket,  who 
takes  it  to  a  boy,  who  gives  metal  checks  in  exchange  and 
registers  each  shopman's  sales."  This  is  of  course  applicable 
to  the  larger  stores  only.  No  absolute  check  upon  the  mana- 
ger's operations  has  yet  been  devised.  The  best  safeguard  is 
the  watchfulness  of  the  committee.  A  dishonest  manager  can- 
not long  retain  his  place  if  the  duty  of  the  committee  is  well 
performed. 

DUTIES  or  MEMBEKS. 

The  matters  of  detail  to  which  we  have  alluded  having  been 
attended  to,  the  store  is  now  ready  to  open  its  doors  for  trade. 


34  A  MANUAL  OF 

All,  whether  members  of  the  society  or  not,  are  welcomed,  and 
non-members  are  permitted  to  share  in  the  profits,  but  not  to 
the  same  extent  as  members,  it  being  usual  to  allow  them  but 
one-half  the  regular  dividend.  It  is  always  desirable  to  induce 
non-members  to  join  the  society,  and  sometimes  a  full  dividend 
is  given  them,  one-half  being  paid  in  cash  on  demand,  and  the 
balance  credited  to  a  share  account  in  their  name,  thus  in  time 
creating  a  deposit  sufficient  in  amount  to  create  them  full  mem- 
bers. 

The  business  of  the  society,  now  that  the  store  is  in  active 
operation,  will  depend  upon  the  fidelity  with  which  members 
patronize  it,  refusing,  as  they  should,  to  be  drawn  away  by  the 
insidious  solicitations  of  private  tradesmen,  who  frequently 
attempt  to  undermine  co-operative  stores  by  cutting  prices, 
offering  liberal  credit,  running  special  lines  of  goods  at  cost 
prices,  and  by  other  devices  contrived  to  lure  co-operative  cus- 
tomers into  their  shops. 

These  attempts  are  likely  to  be  more  effective  in  the  infancy 
of  the  co-operative  store  than  later,  for  the  participation  in 
profits  soon  teaches  the  thoughtful  patron  of  co-operation  that 
his  position  as  a  partner  is  of  more  benefit  to  him  in  the  end 
than  any  temporary  gain  which  he  may  appear  for  the  moment 
to  reap  by  purchasing  at  under-rates  elsewhere. 

But  if  the  store  is  to  be  thoroughly  prosperous  each  member 
must  do  more  than  merely  give  to  it  his  trade.  He  must  take 
a  deep  interest  in  its  affairs,  must  exercise  a  watchful  supervi- 
sion over  its  administration,  attend  the  business  meetings,  par- 
ticipate in  the  election  of  officers,  carefully  study  the  financial 
reports,  or  balance  sheets  so-called,  issued  quarterly,*  and 
teach  himself  to  criticise  intelligently  the  policy  pursued  by 
the  committee  who  are  his  servants  in  immediate  control  of  the 
enterprise. 

At  the  business  meetings  all  members  have  equal  voting 
power,  so  that  the  society  in  its  organization  is  thoroughly 
democratic.  Women,  too,  are  usually  eligible  to  membership 
on  the  same  terms  as  men,  and  in  some  cases  have  been  given 
places  upon  committees. 

Besides  the  quarterly  business  meetings  it  is  usual  to  hold 

*  Or  semi-annually  if  dividends  are  thus  declared. 


DISTRIBUTIVE  CO-OPERATION.  35 

monthly  meetings  at  which  it  is  customary  to  read  the  minutes 
of  the 'meetings  held  weekly  by  the  committee,  and  discussion 
is  permitted  thereon.  Social  gatherings  of  the  members  are 
also  held  annually,  or  even  more  frequently,  as  a  means  of 
welding  together  more' firmly  the  interests  of  all  who  are  con- 
nected with  the  movement. 


STOCK-TAKING  AND  AUDITING. 

Account  of  stock  is  to  be  taken  quarterly  or  half-yearly  and 
profits  divided,  and  this  should  be  carefully  and  honestly  done, 
with  no  attempt  at  over-valuation  or  desire  to  increase  the 
dividends  beyond  the  percentage  fairly  earned.  Accurate 
bookkeeping  is  essential  to  the  pecuniary  welfare  of  the  society, 
and  a  "  Manual  of  Bookkeeping,"  giving  full  advice  upon  this 
head,  has  been  published  by  the  Co-operative  Union. 

The  Union  has  also  published  a  "  Manual  of  Auditing." 
Great  responsibility  rests  upon  the  auditors,  who  are  to  make 
a  complete  examination  of  the  society's  affairs  and  who  are  to 
assure  themselves  that  the  balance  sheet  is  correct,  and  to  vouch 
for  it  by  their  signatures.  They  ought  to  be  men  familiar  with 
accounts  and,  if  possible,  of  some  financial  experience. 


uAn  inexperienced  auditor  will  do  well  to  act  on  the  following 
hints.  Ascertain  that  stock  has  been  carefully  taken  and  checked. 
See  that  everything  is  priced  at  the  cost,  or  a  less  value,  and  that  all 
deteriorations  of  stock  have  been  amply  provided  for.  Count  the 
cash  in  hand.  See  that  proper  vouchers  have  been  received  for  all 
payments ;  and  if  not  sufficiently  master  of  bookkeeping  to  adopt 
short  systems  of  check,  by  comparing  the  totals  of  different  ac- 
counts, check  every  individual  item  from  its  first  entry  until  placed 
in  the  balance  sheet.  Compare  the  members'  pass  books  with  the 
ledgers.  See  that  the  total  of  the  members'  accounts  agrees  with 
the  amount  placed  in  th#  balance  sheet.  Ascertain  that  all  goods 
received  and  taken  into  stock  are  duly  paid  for,  or  else  taken  as  a 
liability,  and  also  that  all  sums  due  by  the  society  to  merchants  and 
others  are  taken  as  liabilities.  The  best  plan  is  to  send  a  circular 
note  at  stock-taking  to  all  persons  the  society  does  business  with, 
asking  them  to  advise  the  auditors  what  sums  are  due  to  them  by 
the  society.  Examine  the  committee's  minute  book,  to  see  that  all 


36  A  MANUAL  OF 

expenditure  has  been  duly  authorized,  and  inspect  the  deeds  and 
other  securities  of  the  society."* 

The  auditors  may  be  of  such  number  as  the  society  may 
direct,  usually  two.  Provision  is  made  for  the  appointment 
of  a  public  auditor  in  lieu  of  auditors  elected  by  the  society. 
No  employe  of  the  society  is  eligible  to  the  office  of  auditor. 
Auditors  are  paid  such  remuneration  as  may  be  voted  them  at 
ordinary  business  meetings. 

Any  member  or  person  in  interest  has  an  individual  right  of 
inspection  of  the  accounts  of  the  society  under  proper  regula- 
tion, but  is  not  permitted,  without  special  authorization,  to 
inspect  the  loan  or  deposit  account  of  any  other  member  with- 
out the  latter's  written  consent. 

In  certain  contingencies  it  is  provided  that  the  affairs  of  the 
society  shall  be  examined  and  reported  upon  by  inspectors 
appointed  by  the  government  registrar.  The  government 
requires  annual  returns  to  be  made  from  every  society,  con- 
taining a  general  statement  of  its  receipts,  expenditures,  funds, 

and  effects. 

ALLOTMENT  OF  PROFITS. 

The  model  rules  provide  for  the  following  allotment  of 
profits  :  (1)  Interest  on  loans,  deposits,  and  preferred  shares, 
if  any ;  (2)  Reduction  of  the  value  of  fixed  stock  and  plant 
at  such  rate  as  the  society  may  direct  (subject  to  change  by 
the  society  at  the  annual  rate  of  ten  per  cent  on  fixtures,  and 
of  two  and  one-half  per  cent  on  buildings)  ;  (3)  Reduction  of 
expenses,  if  any,  incurred  in  forming  the  society ;  (4)  Divi- 
dend on  share  capital ;  (5)  Reserve  fund ;  (6)  Educational 
fund;  (7)  Congress  fund;  (8)  Social  fund;  (9)  Dividend  on 
purchases  and  bonus  to  employe's. 

The  second  item  in  the  foregoing  list  relates  to  the  amount 
written  off  at  each  stock-taking  to  allow  for  the  depreciation  in 
value  of  fixtures  and  buildings  owing  to  wear  and  tear.  There 
is  a  temptation  to  neglect  this  as  any  amount  so  charged  de- 
creases the  amount  of  net  profits,  and  consequently  reduces  the 
dividend.  But  prudent  management  requires  this  depreciation 
to  be  conscientiously  made  in  order  that  the  assets  of  the  so- 
ciety may  not  be  found  over-rated  if  a  financial  panic  should 
overtake  it. 

*  Workingmen  Co-operators,  page  60. 


DISTRIBUTIVE  CO-OPERATION.  37 

The  third  item  is  temporary  only  and  confined  to  the  early 
years  of  the  society.  The  fifth  item  provides  for  the  establish- 
ment of  a  reserve  fund,  the  possession  of  which  adds  to  the 
financial  stability  of  the  society.  Besides  the  allotment  to  such 
a  fund  of  a  portion  of  the  profits,  usually  ten  per  cent,  all  fines 
are  carried  to  it.  The  fund  is  applicable  by  resolution  of  the 
society  to  the  equalization  of  dividends,  to  meet  contingencies 
affecting  the  business  of  the  society,  or  to  any  other  purpose 
which  the  general  meetings  may  from  time  to  time  direct.  The 
income  from  the  fund  is  used  to  increase  dividends  in  the  same 
manner  as  other  income  of  the  society. 

The  application  of  a  portion  of  the  profits  to  educational, 
social,  and  benevolent  purposes,  contemplated  by  the  sixth  and 
eighth  items,  is  always  considered  to  be  in  harmony  with  the 
underlying  principles  of  co-operation.  Many  societies  apply 
two  and  one-half  per  cent  of  the  profits  to  educational  purposes, 
such  as  technical  classes,  maintenance  of  library  and  reading 
room,  etc.  Others  neglect  the  matter  altogether,  although  it  is 
always  advised  by  leading  co-operators.  . 

The  Congress  fund  mentioned  in  the  seventh  item  provides 
for  paying  the  annual  subscription  to  the  Co-operative  Union 
or  to  any  official  organ  recognized  by  the  Congress. 

The  practice  of  allowing  employes  to  share  in  profits  by 
means  of  a  bonus,  provided  for  in  the  second  clause  of  the 
ninth  item,  would  seem  to  be  clearly  in  accord  with  co-opera- 
tive principles,  but,  although  some  societies  practice  it,  it  is 
not  generally  popular.  When  given  it  may  be  said  to  be 
awarded  on  the  ground  that  if  employes  share  in  this  way  they 
will  take  a  livelier  interest  in  the  society's  welfare,  and  thus 
the  bonus  will  be  money  well  expended  in  that  it  will  in  reality 
tend  to  increase  profits.  Except  in  theory,  the  practice  does  not 
seem  to  rest  upon  the  abstract  justice  involved  in  the  principle 
of  awarding  to  all  who  co-operate  in  producing  a  given  result 
a  share  in  the  benefits  obtained.  This  principle  would  seem 
to  demand  the  admission  of  all  employes  to  an  interest  in  the 
business,  but  it  appears  to  be  self-interest  purely  that  induces 
most  of  the  societies  that  have  adopted  this  plan  to  pursue  it. 
At  present,  profit  sharing  with  employes,  although  nearly  always 
advocated  as  a  matter  of  theory,  is  not  extensively  practiced 
among  co-operative  trading  societies. 


38  A  MANUAL  OF 


THE  BALANCE  SHEET. 

The  balance  sheet  issued  to  members  forms  a  complete 
report  of  the  financial  status  of  the  society.  Members  rely 
upon  it  for  their  knowledge  of  the  society's  affairs.  It  should 
show  clearly,  and  in  as  simple  a  form  as  possible,  so  as  to  be 
readily  understood  by  the  average  man,  the  cash  account  of 
the  society,  giving  its  cash  assets  and  receipts  upon  one  side, 
and  its  liabilities  and  cash  expenditures  upon  the  other.  The 
trade  account  should  also  be  shown,  giving  upon  the  debit  side 
the  value  of  stock  at  beginning  of  quarter,  amount  of  subse- 
quent purchases,  with  expenses  and  outstanding  liabilities,  if 
any,  for  purchases,  and  on  the  credit  side  the  amount  of  sales 
liabilities  at  beginning  of  quarter,  value  of  stock  at  end  of 
quarter,  etc.,  the  balance  of  the  account  showing  the  net  profit. 
The  expense  account  should  be  shown  in  detail,  and  a  concise 
summary  of  the  capital  account  should  appear,  giving  the  assets 
and  liabilities  in  detail,  followed  by  a  detailed  statement  of  the 
disposal  of  profits.  The  balance  sheet  ought  to  be  published 
several  days  before  the  general  meeting,  so  as  to  give  members 
an  opportunity  to  study  it  and  compare  it  with  former  issues, 
that  they  may  be  able  to  criticise  it,  if  need  be,  and  to  question 
it  intelligently  at  the  meeting. 

SUMMARY  OF  ESSENTIAL  POINTS. 

We  have  now  given  such  a  description  of  a  retail  distributive 
society  as  will,  we  believe,  enable  the  reader  to  understand  how 
such  a  society  is  formed  and  carried  on.  Besides  the  points  we 
have  mentioned  the  model  rules  contain  provisions  for  settling 
by  arbitration  disputes  arising  between  a  member  or  any  inter- 
ested person  and  he  society  or  an  officer  thereof;  for  expelling 
any  member  who  may  be  guilty  of  conduct  detrimental  to  the 
society  and  for  the  payment  to  such  a  member  of  the  sums 
paid  in  on  shares  held  by  him ;  and  the  necessary  provisions 
for  conduct  of  business,  transfer  of  stock,  change  of  name 
of  society,  etc. 

We  now  present  the  following  summary  of  essential  points 
and  causes  of  success  and  failure,  for  which  we  are  indebted  to 
the  manual  entitled  "  Workingmen  Co-operators."  We  find 
them  nowhere  else  so  succinctly  stated. 


DISTRIBUTIVE  CO-OPERATION.  39 

^Essential  Points,  (a)  The  store  is  open  to  all;  (b)  charges 
ordinary  market  prices ;  (c)  receives  ready  money  only,  and  gives 
no  credit ;  (d)  gives  dividend  in  proportion  to  purchases  ;  (e)  every 
,  member  must  have  a  share  or  shares,  and  receives  good  interest  on 
them ;  (/)  all  are  equal  in  voting  power,  whether  they  have  few  or 
many  shares ;  (g)  the  store  sells  genuine  articles,  which  are  what 
they  profess  to  be ;  (h)  the  store  has  an  honest  manager  and  an 
active  committee ;  (i)  the  society  insists  on  an  efficient  and  intel- 
ligent audit  and  stock-taking. 

Causes  of  Success.  (1)  A  clear  understanding  and  performance 
of  the  duties  of  an  officer,  an  employe,  and  a  member ;  (2)  com- 
petent and  painstaking  officers  ;  (3)  competent  and  trustworthy  em- 
ployes ;  (4)  proper  security  for  the  honesty  and  efficiency  of  the 
principal  employes ;  (5)  amicable  and  earnest  working  together ; 
(6)  promptitude  and  punctuality  in  business ;  (7)  impartiality, 
civility,  and  pleasant  manners  in  the  members  and  in  the  staff ; 
(8)  generous  treatment  of  the  employes ;  (9)  judicious  purchasing 
and  careful  regulation  of  the  stocks ;  (10)  ready  money  purchases 
and  ready  money  sales;  (11)  carefully  regulated  expenses;  (12) 
judicious  investment  of  all  surplus  capital ;  (13)  ample  deprecia- 
tion of  property ;  (14)  ample  reserve  funds ;  (15)  good  bookkeep- 
ing and  auditing ;  (16)  officers  giving  full  and  free  explanations  to 
the  members'  meetings  ;  (17)  members  having  full  confidence  in  the 
officers. 

Causes  of  Failure.  (1)  Allowing  the  storekeeper  to  do  as  he 
likes ;  (2)  allowing  credit  to  purchasers ;  (3)  bad  bookkeeping  and 
auditing  ;  (4)  bad  rules  ;  (5)  carrying  repairs  and  renewals  to  prop- 
erty account  instead  of  expenses  account ;  (6)  competing  with  all 
the  'cutting'  shops;  (7)  expenses  too  great  for  the  business ;  (8) 
employment  of  incompetent  persons  ;  (9)  dishonesty ;  (10)  injudi- 
cious purchasing;  (11)  injudicious  and  frequent  changes  of  policy; 
(12)  members  purchasing  away  from  the  store;  (13)  not  taking 
ample  security  from  persons  in  a  position  to  misapply  the  society's 
effects  ;  (14)  permitting  the  manager  to  buy  away  from  the  whole- 
sale societies  ;  (15)  inefficient  officers  ;  (16)  members  being  unreas- 
onable and  quarrelsome;  (17)  purchasing  goods  on  credit;  (18) 
overbuilding;  (19)  starting  branches  or  new  departments  before  the 
society  is  strong  enough  to  bear  the  burden  ;  (20)  waste  behind  the 
counter  from  bad  stock  keeping  or  careless  weighing." 

THE  WHOLESALE   STORES. 

The  success  and  multiplication  of  retail  stores  suggested  the 
propriety  of  establishing  a  central  purchasing  agency  or  whole- 


40  A  MAJSTUAL  OF 

sale  depot.  The  benefits  which  it  was  expected  would  be 
derived  from  such  an  institution,  and  which  have  been  largely 
realized,  were,  among  others,  the  following : 

"  Stores  will  be  enabled,  through  the  agency,  to  purchase  more 
economically  than  heretofore,  by  reaching  the  best  markets. 

Small  stores  and  new  stores  are  at  once  put  in  good  position,  by 
being  placed  directly  (through  the  agency)  in  the  best  markets,  thus 
enabling  them  to  sell  as  cheap  as  any  first-class  shopkeeper. 

As  all  stores  will  have  the  benefit  of  the  best  markets  by  means  of 
the  agency,  it  follows  that  dividends  paid  by  stores  must  be  more 
equal  than  heretofore,  and,  by  the  same  means,  dividends  will  be 
considerably  augmented. 

Stores,  especially  large  ones,  will  be  able  to  carry  on  their  busi- 
nesses with  less  capital.  Large  stores  will  not,  as  now,  be  necessitated, 
in  order  to  reach  the  minimum  prices  of  the  markets,  to  purchase 
goods  they  do  not  require  for  the  immediate  supply  of  their  mem- 
bers. 

Stores  will  be  able  to  command  the  services  of  a  good  buyer,  and 
will  thus  save  a  large  amount  of  labor  and  expense,  by  one  pur- 
chaser buying  for  some  150  stores,  while  the  great  amount  of  blun- 
dering in  purchasing  at  the  commencement  of  a  co-operative  store 
will  be  obviated."  * 

In  our  historical  review  we  have  mentioned  the  unsuccessful 
experiments  which  preceded  the  establishment  of  the  English 
Co-operative  Wholesale  in  1864.  It  is  not  necessary  to  elabo- 
rate these  experiments.  They  failed,  partly  because  the  co- 
operative movement  had  not  become  sufficiently  strong  to 
sustain  such  an  institution,  and  partly  on  account  of  defective 
business  principles  embodied  in  their  administration.  The 
great  success  of  the  existing  English  wholesale  and  of  the 
Scottish  wholesale,  established  at  a  later  date,  is  sufficient  to 
commend  the  plan  upon  which  they  are  organized  to  those 
desiring  to  found  a  similar  enterprise  elsewhere,  and  we  there- 
fore give  a  detailed  description  of  its  features. 

In  its  organization  the  English  wholesale  is  a  federation  to 
which  none  but  co-operative  societies  are  admitted.  Such  an 
organization  presupposes  the  existence  of  retail  associations 
for  whose  benefit  the  wholesale  society  is  formed.  At  first 

*  Co-operative  Annual,  1885 ;  page  70. 


DISTRIBUTIVE  CO-OPERATION.  41 

each  retail  society  in  joining  the  wholesale  subscribed  capital 
in  the  proportion  of  one  share  to  each  of  its  members,  the  value 
of  each  share  being  5s.,  the  same  being  transferable,  one  shil- 
ling to  be  paid  up  on  each  share  at  time  of  subscription  and 
interest  and  dividends  to  remain  undrawn  until  balance  of  capi- 
tal subscribed  is  paid  up. 

In  1871  the  value  of  shares  was  changed  to  £5,  and  the 
number  of  5s.  shares  decreased  accordingly.  Societies  were 
now  required  to  take  up  one  share  to  each  twenty  members, 
and  in  the  following  year  this  provision  was  changed  to  one 
share  to  ten  members. 

It  was  at  first  proposed  to  sell  goods  at  cost,  with  a  small 
commission  added  to  cover  expenses.  This  was  soon  aban- 
doned as  impracticable,  and  a  plan  identical  with  that  adopted 
in  the  retail  stores  was  substituted,  goods  being  sold  at  a  profit, 
and  all  net  profits  divided  among  purchasers  in  proportion  to 
purchases.  As  in  most  of  the  retail  stores,  non-shareholding 
purchasers  are  allowed  one-half  the  dividend  given  to  share- 
holders. 

Business  was  begun  in  1864  at  Manchester,  where  the  cen- 
tral offices  are  now  located.  The  growth  of  business  led  to  the 
establishment  of  main  selling  branches  at  Newcastle,  in  1871, 
and  at  London,  in  1874,  and  sub-branches  at  Leeds,  in  1882, 
and  at  Bristol,  in  1884. 

Buying  branches,  also,  have  been  established  at  Tipperary, 
Killmallock,  Limerick,  Armagh,  Waterford,  Tralee,  and  Cork, 
in  Ireland,  for  the  purchase  of  Irish  butter,  an  important  sta- 
ple, of  which  the  wholesale  society  is  the  largest  purchaser.  A 
purchasing  branch,  which  is  also  a  forwarding  depot,  is  main- 
tained at  Liverpool,  a  buying  agency  for  American  produce  at 
New  York,  N.  Y.,  and  purchasing  agencies  at  Calais,  Rouen, 
Copenhagen,  Hamburg,  and  a  special  agency  for  the  purchase 
of  tea  and  coffee  at  London. 

The  society  also  conducts  a  shipping  business,  which  owes 
its  origin  to  its  extensive  importations  of  foreign  produce,  much 
of  which  it  was  desirable  to  obtain  directly  from  the  producers 
and  to  secure  its  careful  packing  and  prompt  despatch.  Four 
steamers  are  now  owned  by  the  society,  running  regularly 
between  Garstow  and  Rouen,  Goole  and  Calais,  and  Goole  and 
Hamburg. 


42  A  MANUAL  OF 

The  society  also  sustains  a  banking  department  on  the  usual 
plan  of  such  institutions.  The  profits  of  the  banking  depart- 
ment are  apportioned  as  follows  : 

"  First.  The  customer  who  has  a  credit  balance  with  the  bank 
will  share  in  the  profits  on  the  earnings  in  proportion  to  the  amount, 
varying  from  a  quarter  to  one  per  cent  over  the  interest  the  cus- 
tomer would  get  from  the  usual  terms  allowed  by  the  ordinary 
banker. 

Second.  The  debit  customers  share  in  the  profit  too  in  a  sim- 
ilar way  to  the  credit  customer,  on  the  amount  of  interest  which  is 
paid  on  the  debit  balances  of  their  account. 

Third.  A  customer  may  be  a  credit  and  debit  customer  in  the 
same  quarter,  and  would  receive  profits  both  as  borrower  and 
lender."* 

Besides  dealing  largely  in  groceries  and  provisions  the  so- 
ciety manufactures  biscuits,  sweets,  dry  and  soft  soap,  and 
boots  and  shoes;  and  supplies  drapery,  hardware,  carpets, 
crockery,  fancy  goods,  and  general  furnishings.  It  is  the 
selling  agency  of  several  co-operative  productive  societies 
manufacturing  dry  goods,  dress  goods,  ready  made  and  or- 
dered clothing,  miscellaneous  textiles,  furniture,  watches,  ma- 
chinery, etc. 

Just  as  the  retail  stores  are  administered  by  a  committee 
chosen  by  members,  so  the  wholesale,  conducting  the  widely 
diversified  business  that  we  have  outlined,  is  governed  by  a 
committee  elected  by  ballot  by  delegates  from  the  societies 
composing  its  membership,  each  society  being  entitled  to  one 
delegate  to  every  500  members  or  fractional  part  thereof,  every 
delegate  having  one  vote. 

The  manner  of  conducting  the  wholesale  business  is  analo- 
gous to  that  of  the  retail.  The  general  committee  at  Manchester 
has  16  members.  The  London  and  Newcastle  branches  are 
conducted  by  branch  committees  of  8  members  each,  respon- 
sible to  the  general  committee,  and  in  the  deliberations  of  the 
latter  represented  by  one  delegate  from  each  branch.  As  to 
stock-taking,  which  is  done  quarterly,  auditing,  etc.,  the  de- 

*  Co-operative  Annual,  1885 ;  page  16. 


DISTRIBUTIVE  CO-OPERATION.  43 

rfcription  which  we  have  given  of  the  retail  stores  applies 
equally  to  the  wholesale.  Four  auditors  are  employed  who 
are  elected  by  the  shareholders,  and  paid  an  annual  salary  of 
£40  each,  besides  the  allowance  of  second  class  railway  fares. 
Full  quarterly  balance  sheets  are  published.  A  strong  reserve 
fund  is  maintained.  The  value  of  the  property  is  written 
down,  or  depreciated,  at  each  stock-taking,  at  the  following 
rates:  land,  at  2|  per  cent;  buildings,  at  5  per  cent;  fixed 
stock,  at  7|-  per  cent ;  all  depreciations  being  taken  upon  the 
original  cost.  All  shares  are  transferable  without  charge,  and 
the  society  has  a  lien  on  all  shares. 

When  societies  desire  to  open  an  account  with  the  wholesale 
they  are  required  to  furnish  a  copy  of  their  last  balance  sheet 
and  registered  rules.  If  a  balance  sheet  has  not  been  issued 
they  are  directed  to  state  the  number  of  their  members,  amount 
of  paid-up  share  capital,  whether  credit  is  allowed,  and,  if  so, 
to  what  extent,  and  the  amount  of  business  done  or  probable 
amount  which  will  be  done  by  them.  If  not  registered  at  time 
of  application  but  in  process  of  being  so,  cash  is  required  with 
each  order.  After  registration  cash  must  be  forwarded  with 
the  first  order,  and  on  subsequent  orders  payment  must  be 
made  within  seven  days  from  date  of  invoice.  An  application 
for  shares  from  any  society  or  company  must  be  made  by  reso- 
lution of  some  general  or  committee  meeting  of  such  society  or 
company,  contained  in  writing  and  attested  by  the  signatures 
of  the  secretary  and  three  members.  The  number  of  shares 
to  be  taken  by  each  society,  as  before  stated,  must  be  not  less 
than  one  to  every  ten  members,  and  this  number  must  be 
increased  annually  as  the  number  of  members  increases.  The 
liability  of  each  shareholding  society  is  limited  to  the  amount 
of  its  shares.  Share  capital  receives  interest  at  the  rate  of  five 
per  cent  per  annum. 

The  administration  of  the  Scottish  wholesale  is  substantially 
the  same  as  that  of  the  English  wholesale,  except  that  shares 
therein  may  only  be  transferred  with  the  consent  of  the  com- 
mittee and  two-thirds  majority  of  a  special  meeting  of  share- 
holders, and  that  employes  share  in  dividends  in  proportion  to 
wages  at  double  the  rate  per  pound  that  is  allowed  on  mem- 
bers' purchases.  Shareholders  have  one  vote  each,  and  one 


A  MANUAL  OF 


additional  vote  to  each  £500  purchases.  Shares  are  10s.  each, 
one  shilling  to  be  paid  in  on  application.  Both  the  English 
and  Scottish  wholesale  societies  are  authorized  to  carry  on  any 
business. 

The  following  statistical  statement  exhibits  the  financial 
relations  existing  between  the  retail  societies  and  the  English 
wholesale,  by  districts,  for  the  year  ending  December  31,  1883, 
the  latest  available  :  * 


DlSTKICTS. 

Number  of 
Members, 
December 
31,  1883. 

TOTAL  CAPITAL,  DECEM- 
BER 31,  1883. 

CAPITAL  INVESTED  WITH 
WHOLESALE    SOCIETY, 
DECEMBER  31,  1883. 

Total  sales 
during  year 

Share. 

Loan. 

Share. 

Loan. 

Manchester,    . 

399,108 

£ 
4,954,667 

£ 
445,966 

£ 
138,021 

358,331 

£ 
11,352,437 

Newcastle,     . 

95,994 

700,248 

43,850 

26,461 

51,377 

3,359,763 

London,  . 
Totals,      . 

61,891 

375,429 

49,931 

19,385 

13,579 

1,366,729 

556,993 

6,030,344 

539,747 

183,867 

423,287 

16,078,929 

DISTRICTS. 

PURCHASES  FROM  WHOLESALE  SOCIETY  DURING  THE  YEAR. 

Percentage 
of  purchases 
from  Whole- 
sale Society 
on  the  total 
sales. 

Groceries 
and 
l*rovisions. 

Drapery. 

Woollen 
Cloth. 

Boots 
and 
Shoes. 

Furniture 
and 
Hardware. 

Total 
purchases. 

Manchester,  . 

£ 

2,445,804 

134,076 

£ 
15,416 

£ 

81,372 

£ 
31,851 

£ 
2,708,519 

23.9 

Newcastle,    . 

860,277 

87,773 

14,319 

52,953 

12,747 

1,028,069 

30.6 

London, 
Totals,    . 

323,449 

19,025 

1,867 

18,142 

3,608 

366,091 

26.7 

3,629,530 

240,874 

31,602 

152,467 

48,206 

4,102,679 

25.5 

The  inspection  of  the  preceding  table  develops  a  curious 
fact.  Although  the  co-operative  wholesale  society  is  a  federa- 
tion composed  of  the  retail  associations,  its  capital  being  evolved 
from  shares  taken  up  by  the  latter,  yet  a  comparatively  small 
part  of  the  supplies  of  the  retail  stores  are  purchased  by  them 
from  the  wholesale.  The  table  shows  that  during  1883  the 
purchases  from  the  wholesale  society  were  but  25.5  per  cent  of 
the  total  sales  made  by  the  retails.  That  is  to  say,  although 


Co-operative  Annual,  1885.    See  note  on  page  73,  post. 


DISTRIBUTIVE  CO-OPERATION.  45 

the  fundamental  principle  upon  which  co-operative  distribution 
rests  is  mutual  trade  in  such  manner  that  profits  may  be  saved 
and  equitably  divided  among  the  traders,  yet  when  the  asso- 
ciations themselves  become  buyers  they  have  not  adhered  to 
this  principle  so  far  as  to  confine  their  purchases  to  the  whole- 
sale society  founded  by  themselves  for  the  express  purpose  of 
carrying  out  more  completely  the  fundamental  co-operative 
idea.  The  English  and  Scottish  wholesales  at  present  supply 
only  about  one-third  of  the  goods  required  by  the  retail  stores. 

Undoubtedly  a  certain  percentage  of  the  balance  of  purchases 
made  by  the  retails  is  made  from  other  co-operative  sources 
besides  the  wholesales,  such,  for  instance,  as  co-operative  corn 
(flour)  mills  in  their  immediate  neighborhood,  of  which  there 
are  a  number  in  England,  but  after  this  is  conceded  it  must 
still  be  true  that  a  large  part  of  their  purchases  are  made  from 
private  traders. 

The  reasons  for  this  apparent  neglect  of  what  would  seem  to 
be  the  legitimate  source  of  supply  for  the  retail  associations  are 
no  doubt  various,  and  do  not  plainly  appear.  That  the  success 
which  has  attended  the  wholesales  has  abundantly  justified  their 
establishment  is  uncontested,  and  it  must  be  admitted  that  the 
quality  of  the  supplies  furnished  by  them,  like  that  of  all  sup- 
plies distributed  upon  the  co-operative  plan,  is  above  criticism. 
It  is,  therefore,  a  little  strange  that  no  greater  proportion  of  the 
wholesale  trade  of  the  stores  falls  into  their  hands.  Especially 
is  it  strange,  because  this  trade  is  altogether  controlled  by  the 
leading  co-operators  of  the  kingdom,  in  that  it  rests  entirely 
with  the  committees  of  the  retail  associations,  who  contend  that 
co-operation  rests  upon  a  principle  of  mutual  help  as  well  as 
mutual  pecuniary  profit.  If  these  representative  bodies  are,  as 
may  be  supposed,  imbued  with  the  ideal  upon  which  the  move- 
ment rests,  ought  it  not  to  be  expected  that  in  practice  this 
ideal  would  be  adhered  to  more  closely? 

This  disposition  to  look  elsewhere  than  to  the  wholesales  for 
the  purchase  of  supplies  has,  now  that  a  considerable  amount 
of  co-operative  capital  is  invested  in  the  latter,  in  part  con- 
tributed to  an  interesting  phase  of  the  co-operative  movement. 

In  the  first  place,  the  general  purpose  of  the  co-operative 
societies,  as  stated  by  an  authority  fully  competent  to  speak 


46  A  MANUAL  OF 

for  them,  is  "that  the  business  and  the  work  done  shall  be 
done  not  in  the  interest  of,  nor  in  order  to  enrich,  one  indi- 
vidual, or  a  few,  but  in  the  interest  of  the  general  body  of 
those  who  are  concerned."*  Now  it  is  apparent  that  whenever 
purchases  are  made  outside  the  co-operative  wholesales  a  profit 
which  otherwise  would  be  saved  is  paid  to  private  traders.  To 
this  extent,  therefore,  the  general  purpose,  as  above  stated,  is 
disregarded. 

But  other  results  follow.  Capital  accumulates  with  the 
wholesales  to  a  greater  extent  than  can  be  used  in  the  ordinary 
trade  proceeding  from  the  retail  stores.  To  discourage  the 
investment  of  the  surplus  capital  of  the  latter  would  discour- 
age the  thrift  which  is  one  of  the'  best  outgrowths  of  the  co- 
operative system,  inasmuch  as  it  would  at  once  turn  back  upon 
the  retail  societies  the  savings  of  profits  left  in  their  hands  as 
undrawn  interest-bearing  dividends  by  their  members,  and  leave 
them  with  a  surplus  which  ofttimes  could  not  otherwise  be  profit- 
ably used. 

Considerable  amounts  of  capital  have  thus  from  time  to  time 
accumulated  with  the  English  wholesale  which  might  have  been 
made  available  in  distributive  trade  had  the  entire  wholesale 
trade  of  the  societies  been  given  to  it.  This  surplus  if  depos- 
ited in  bank  would,  indeed,  draw  the  usual  rate  of  interest  on 
deposits,  but  would,  of  course,  be  loaned  by  the  bankers  in  the 
ordinary  course  of  business  at  a  much  higher  rate.  Here 
again,  therefore,  a  profit  would  fall  into  the  pockets  of  individ- 
uals which  ought  to  be  saved  to  the  co-operative  membership, 
and  in  this  instance,  as  well  as  in  every  case  where  supplies  are 
purchased  outside  the  wholesales,  co-operative  capital  would  be 
used  to  benefit  competitive  trade. 

This  condition  of  affairs,  soon  perceived  by  those  interested 
in  the  extension  of  the  co-operative  idea,  was  instrumental  in 
engrafting  upon  the  wholesale  society,  which  until  then  had 
attempted  nothing  beyond  co-operative  distribution,  a  system 
of  production.  An  avenue  of  investment  was  needed  for  the 
investment  of  surplus  capital,  and  it  was  desirable  that  this 
capital,  if  possible,  should  be  directed  into  co-operative  chan- 

*  Messrs.  Ackland  and  Jones.    Workingmen  Co-operators,  page  9. 


DISTRIBUTIVE  CO-OPERATION.  47 

nels.  Certain  staple  articles  were  in  constant  demand  by 
the  retail  associations.  If  such  articles  were  purchased  by  the 
wholesale  to  be  re-sold  to  the  retail  stores,  or  if  they  were  pur- 
chased by  the  retail  stores  directly  from  the  producers,  com- 
petitive trade  was  directly  benefited.  It  was  also  desirable  to 
keep  travellers  for  private  firms  out  of  co-operative  stores,  and 
as  far  as  possible  equip  the  wholesale  store  with  everything 
needed  by  the  retails.  What  more  natural,  therefore,  than 
that  the  wholesale  society  should  undertake  the  manufacture  of 
such  articles,  using  for  that  purpose  the  surplus  capital  accu- 
mulating in  its  hands  ? 

To  employ  this  capital  in  productive  enterprises  involved  a 
new  departure,  which  was  not  undertaken  without  full  discus- 
sion. This  discussion  has  not  yet  entirely  ceased.  It  was  held 
then,  and  is  still  held,  that  the  wholesale  society  should  confine 
itself  to  distribution  and  leave  production  to  other  organiza- 
tions. If  the  wholesale  were  to  engage  in  manufacturing  it 
would  become  a  powerful  and  injurious  competitor  with  small 
and  struggling  productive  societies,  whom  it  ought  rather  to 
aid  by  liberal  loans  of  capital.  Finally,  both  plans  were 
adopted.  Large  advances  were  made  to  productive  com- 
panies, and  experiments  were  cautiously  begun  in  co-operative 
manufacturing  under  the  direct  management  of  the  wholesale 
society. 

The  first  productive  department  opened  was  the  manufactory 
of  biscuits,  confections,  and  soap  at  Crumpsall,  near  Manches- 
ter. From  these  works  none  but  registered  co-operative  so- 
cieties are  supplied.  The  establishment  is  equipped  with  the 
best  machinery ;  in  the  baking  department  flour  from  co-opera- 
tive mills  is  used,  and  goods  free  from  adulteration  are  pro- 
duced. 

The  Crumpsall  works  were  started  in  1873.  During  the 
same  year  a  boot  and  shoe  manufactory  at  Leicester  was 
founded,  confined  to  light  goods,  and,  in  1880,  a  factory  for 
the  production  of  heavy  boots  and  shoes  was  put  in  operation 
at  Heckmondwike  in  Yorkshire.  More  than  800  styles  of 
men's,  women's,  children's,  and  infants'  shoes  are  produced  at 
Leicester,  and  both  establishments  make  goods  to  measure 
upon  special  orders.  Nothing  but  genuine  goods  are  made, 


48 


A  MANUAL  OF 


and  paper  or  composition  as  a  substitute  for  leather  have  never 
been  used. 

Since  1874  the  society  has  also  carried  on  the  manufacture 
of  soap  upon  a  limited  scale  at  Durham. 

The  productive  departments  conducted  by  the  wholesale 
society  have  been  generally  successful,  as  will  appear  from 
the  following  table  showing  the  average  percentage  of  profit 
on  capital  employed  for  the  year  ending  September  22,  1883, 
and  also  from  the  commencement  of  each  department.* 


DEPARTMENTS. 

Percentage  of  profit 
for    year     ending 
September  22,  1883. 

Percentage  of  profit 
from     commence- 
ment of  work. 

Crumpsall,  

22£ 

13* 

Leicester,     
Durham,      ....... 

51 
3i 

?1 
31 

Heckmondwike,  

5f 

loss  1£ 

"The  result  is  certainly  not  much  to  boast  of  in  the  shape  of 
direct  profits,  but  it  must  be  remembered  that,  in  addition  to  the 
usual  difficulties  of  a  new  establishment  in  each  case,  the  private 
manufacturers  who  were  already  selling  to  the  stores  had  to  be  dis- 
placed, and  that  this  could  only  be  accomplished  by  goods  of  ster- 
ling quality  at  low  prices ;  so  that  if  the  stores  have  not  received 
large  dividends  directly  from  the  wholesale,  their  members  have 
benefited  by  the  low  prices  at  which  sterling  quality  goods  have 
been  supplied  to  them.  And  it  is  not  a  small  thing  to  be  able  to 
say  that  in  a  series  of  years  which  have  resembled  a  prolonged 
panic,  when  individual  traders  and  joint  stock  companies  have  been 
falling  into  bankruptcy  on  every  side,  no  failure  has  occurred  in  any 
of  the  direct  adventures  of  the  Wholesale  Society ."f 

The  investments  made  in  outside  companies  have  not  been 
so  successful,  a  loss  of  £52,057  being  reported  up  to  the  year 
1884  upon  loans  of  this  sort. 


*  Co-operative  Annual,  1884. 

f  Dr.  John  Watts.    Co-operative  Annual,  1884. 


DISTRIBUTIVE  CO-OPERATION.  49 

The  shipping  enterprises  of  the  wholesale  have  not  returned 
a  direct  profit,  but  the  advantages  of  being  brought  into  close 
communication  with  foreign  producers,  and  of  being  indepen- 
dent of  private  ship  owners,  are  thought  to  more  than  offset  the 
lack  of  direct  financial  returns.  As  a  rule,  however,  as  in  the 
productive  departments,  the  investments  wholly  controlled  by 
the  society  have  proved  more  profitable  than  those  in  which 
the  society  had  a  partial  interest  only.  The  vessels  owned  by 
the  society  have  many  times  gained  a  profit  while  those  char- 
tered for  its  use  from  private  owners  have  been  sailed  at  a  loss. 
This  is  graphically  shown  by  the  record  of  the  steamship  "Cam- 
brian," on  the  Goole-Calais  and  Goole-Hainburg  lines,  which 
was  sailed  33  voyages  on  charter  at  a  total  loss  of  over  £553, 
and  was  then  purchased  by  the  society,  her  subsequent  104 
voyages  returning  a  profit  of  more  than  £1455.  The  exten- 
.sion  of  the  shipping  business  is  contemplated  and  it  would  not 
be  surprising  if  further  productive  enterprises  were  under- 
taken. For  capital  still  continues  to  accumulate  faster  than 
trade  increases. 

u  It  is  plain  that  if  the  Co-operative  Wholesale  is  to  increase  and 
flourish  in  the  future  as  it  has  done  in  the  past,  it  must  find  more 
employment  for  its  capital.  In  1864  it  turned  over  its  capital 
twenty-one  times  in  thirty  weeks.  In  1874  its  capital  was  turned 
over  fifteen  times.  In  1883  its  capital  is  being  turned  over  at  the 
rate  of  seven  times  in  the  year.  If,  in  the  two  or  three  years  prior 
to  the  panic,  its  capital  had  been  as  fully  employed  for  its  own  pur- 
poses as  it  was  from  1864  to  1870,  the  companies  which  depleted  it 
of  £58,000  would  never  have  sought  advances,  or  if  they  had  sought 
would  not  have  obtained  them,  for  the  wholesale  would  have  been  in 
a  position  to  say,  u  No,  gentlemen,  what  you  ask  is  beyond  our 
power."  Capital,  to  be  kept  safely,  must  be  kept  at  work.  The 
Wholesale  neglects  one  of  the  most  important  duties  laid  upon  it  if 
it  ceases  to  be  the  depository  of  the  savings  of  the  stores,  for  then 
it  encourages  the  consumption  of  the  quarterly  dividends  and  con- 
tributes only  to  the  present  enjoyment  instead  of  to  the  permanent 
welfare  of  its  members.  If,  however,  it  receives  money  it  must  get 
leave  to  employ  it,  and  the  modes  of  employment  at  present  in  the 
powef  of  the  Wholesale  are  few."* 

*  Dr.  John  Watts. 


50  A  MANUAL  OF 

From  the  foregoing  it  will  be  seen  that  whatever  difficulties 
surround  the  administration  of  the  co-operative  stores  the  lack 
of  capital  is  not  one.  As  the  stores  perform  the  functions  of 
savings  banks  of  deposit  a  glut  of  capital  becomes  itself  a  dif- 
ficulty not  easily  overcome  in  the  absence  of  avenues  of  in- 
vestment at  once  safe,  remunerative,  and  in  harmony  with 
co-operative  principles.  Although  the  number  of  shares  which 
may  be  held  by  one  person  is  limited  to  200,  it  is  part  of  the 
policy  of  the  societies  to  encourage  the  investment  on  the  part 
of  members  of  whatever  savings  they  may  be  able  to  make  in 
any  way  out  of  their  wages  as  loan  capital,  and  if  it  could  be 
profitably  used  the  capital  of  the  stores  might  be  indefinitely 
increased.  No  question  is  more  frequently  discussed  than  this 
of  making  the  surplus  capital  productive. 


STATISTICAL  ABSTKACT. 

The  growth  and  present  condition  of  the  co-operative  move- 
ment may  be  presented  statistically  in  four  tables,  which  follow. 

These  tables  are  based  upon  the  returns  made  to  the  regis- 
trar, corrected  by  data  in  the  possession  of  the  Central  Co- 
operative Board.  For  their  compilation  in  all  years,  except  the 
last,  we  are  indebted  to  the  Statistical  Annual  issued  by  the 
Co-operative  Wholesale  Society,  Limited.  For  the  year  1883 
we  have  used  the  abstract  of  the  Registrar's  returns  contained 
in  the  Report  of  the  Central  Board  to  the  Congress  of  1885. 
The  statistics  include  a  few  productive  societies,  viz :  38  in 
1883,  and  the  societies  on  the  civil  service  supply  plan,  but 
the  larger  part  of  the  societies  are  distributive  societies  on  the 
Rochdale  plan.  A  few  are  distributive  societies  supplying 
special  articles,  such  as  bread,  flour,  coal,  furniture,  coffee,  etc. 
No  land  or  building  societies  are  included 

Of  the  societies  on  the  civil  service  plan  in  the  year  1883, 
two  are  in  England  —  The  Civil  Service  Supply  Association, 
London,  and  the  Portsmouth  Supply  Association — ,  and  two  in 
Scotland.  These  are  the  only  societies  on  that  plan  included 
in  the  returns.  The  two  English  societies  had  a  total  member- 
ship at  the  end  of  the  year  of  4,916 ;  sales  during  the  year, 
£1,676,883;  stock  at  the  end  of  the  year,  £333,139;  trade 


DISTRIBUTIVE  CO-OPERATION.  51 

•expenses,  £157,746;  share  capital,  £344,875;  loan  capital, 
£25,916;  net  profit  for  the  year,  £47,018.  The  two  Scottish 
societies'  membership  was  4,948 ;  sales  during  the  year, 
£161,634;  stock  at  the  end  of  the  year,  £29,335;  trade  ex- 
penses, £13,404;  share  capital,  £17,137  ;  no  loan  capital;  net 
profit  for  the  year,  £6,744. 

With  these  explanations  the  tables  are  presented. 


A  MANUAL  OF 


Statistics  of  Co-operative  Societies 


NUMBER  OF  SOCIETIES. 

CAPITAL  AT  END  OF  YEAR. 

Number 

YFAH 

of 

XEAR* 

Registered 
in  the  year. 

Not  making 
Returns. 

Making 
Returns. 

Members. 

Share. 

Loan. 

1862 
1863 

a  454 
51 

68 
73 

332 
381 

90,341 
111,163 

£428,376 
579,902 

£54,499 
76,738 

1864 

146 

110 

394 

129,429 

684,182 

89,122 

1865 

101 

182 

403 

124,659 

819,367 

107,263 

1866 

163 

240 

441 

144,072 

1,046,310 

118,023 

1867 

137 

192 

577 

171,897 

1,475,199 

136,734 

1868 

190 

93 

673 

211,781 

1,711,643 

177,706 

1869 

65 

133 

754 

229,861' 

1,816,672 

179,054 

1870 

67 

153 

748 

248,108 

2,035,626 

197,029 

187] 

56 

235 

746 

262,188 

2,305,951 

215,453 

1872 

141 

113 

935 

330,550 

2,969,573 

371,541 

1873 

226 

138 

983 

387,765 

3,581,405 

496,830 

1874 

130 

232 

1,031 

412,733 

3,905,093 

587,342 

1875 

117 

285 

1,170 

480,076 

4,403,547 

849,990 

1870 

82 

177 

1,167 

508,067 

5,141,390 

919,772 

1877 

67 

246 

1,148 

529,081 

5,445,449 

1,073,275 

1878 

52 

121 

1,185 

560,993 

5,647,443 

1,145,717 

1879 

52 

146 

1,151 

572,621 

5,755,522 

1,490,343 

1880 

69 

100 

1,183 

604,063 

6,232,093 

1,341,290 

1881 

66 

_ 

1,240 

643,617 

6,940,173 

1,483,583 

1882 

51 

108 

1,156 

655,045 

7,298,441 

1,464,059 

1883 

42 

151 

1,153 

680,165 

7,467,849 

1,524,341 

Statistics  of  Co-operative  Societies 


1862 

a  454 

68 

332 

90,341 

£428,376 

£54,499 

1863 

-  51 

73 

381 

111,163 

579,902 

76,738 

1864 

146 

110 

394 

129,429  ' 

684,182 

89,122 

1865 

101 

182 

403 

124,659 

819,367 

107,263 

1866 

163 

240 

441 

144,072 

1,046,310 

118,023 

1867 

137 

192 

577 

171,897 

1,475,199 

136,734 

1868 

190 

93 

673 

211,781 

1,711,643 

177,706 

1869 

65 

133 

754 

229,861 

1,816,672 

179,054 

1870 

67 

153 

748 

248,108 

2,035,626 

197,029 

1871 

56 

235 

746 

262,188 

2,305,951 

215,453 

1872 

138 

104 

927 

339,986 

2,968,758 

371,531 

1873 

225 

135 

978 

387,301 

3,579,062 

496,740 

1874    . 

128 

227 

1,026 

412,252 

3,903,608 

586,972 

1875 

116 

283 

1,163 

479,284 

4,793,909 

844,620 

1876 

82 

170 

1,165 

507,857 

5,140,219 

919,762 

1877 

66 

240 

1,144 

528,576 

5,437,959 

1,073,265 

1878 

52 

119 

1,181 

560,703 

5,645,883 

1,145,707 

1879 

51 

146 

1,145 

573,084 

5,747,907 

1,496,143 

1880 

67 

100 

1,177 

603,541 

6,224,271 

1,341,190 

188] 

62 

1,230 

642,783 

6,9-'<7,2S4 

1,483,583 

1882 

51 

108 

1,145 

654,038 

7,289,359 

1  ,463,950 

1883 

42 

151 

1,095 

679,294 

7,459,139 

1,524,241 

a  The  total  number  registered  to  December  31, 1862. 

b  Estimated  on  the  basis  of  the  returns  made  to  the  Central  Co-operative  Board  for  1881. 

c  Includes  joint  stock  companies. 


DISTRIBUTIVE  CO-OPERATION. 


53 


in  the  United  Kingdom  — 1862-1883. 


CAPITAL  INVESTED  IN  — 

Sales. 

Net  Profit. 

Trade 
Expenses. 

Trade 
Stock. 

Industrial  and 
Provident 
Societies,  and 
Sources  other 

Joint 
Stock 
Compa- 

Profit de- 
voted to 
Education. 

of 
Reserve 
Fund. 

than  Trade. 

nies. 

£2,333,523 

£165,562 

£127,749 

_ 

_ 

_ 

_ 

_ 

2,073,778 

216,005 

167,620 

- 

- 

- 

- 

- 

2,836,606 

224,460 

163,147 

— 

- 

— 

— 

— 

3,373,847 

279,226 

181,766 

- 

- 

- 

- 

- 

4,462,676 
6,001,153 

372,307 
398,578 

219,746 
255,923 

£583,539 

c  £494,429 

~ 

£3,203 

£32,629 

7,122,360 

424,420 

294,451 

671,165 

137,397 

£166,398 

3,636 

33,109 

7,353,363 

438,101 

280,116 

784,847 

117,586 

178,367 

3,814 

38,630 

8,201,685 

553,435 

311,910 

912,102 

126,736 

204,876 

4,275 

52,990 

9,463,771 

666,399 

346,415 

1,029,446 

145,004 

262,594 

5,097 

66,631 

13,012,120 

936,715 

479,130 

1,383,063 

318,477 

382,846 

6,«96 

93,601 

15,639,714 

1,110,658 

556,540 

1,627,402 

370,402 

449,039 

7,107 

102,722 

16,374,053 

1,228,038 

594,455 

1,781,053 

418,301 

522,081 

7,949 

116,829 

18,499,901 

1,429,090 

686,178 

2,095,675 

667,825 

553,454 

10,879 

241,930 

19,921,054 

1,743,980 

1,279,856 

2,664,042 

- 

- 

- 

- 

21,390,447 

1,924,551 

1,381,961 

2,648,282 

- 

- 

- 

- 

21,402,219 

1,837,660 

1,494,607 

2,609,729 

— 

— 

— 

- 

20,382,772 

1,857,790 

1,537,138 

2,857,214 

_ 

_ 

- 

- 

23,248,314 

b  1,868,599 

1,429,160 

2,880,076 

d  3,429,940 

17,407 

13,910 

- 

24,945,063 

1,981,109 

_ 

3,053,333 

_ 

— 

13,825 

— 

26,598,295 

2,108,498 

1,625,170 

3,279,374 

4,085,871 

_ 

14,730 

_ 

28,089,310 

2,318,932 

1,727,875 

3,196,460 

4,395,786 

- 

15,754 

- 

in  Great  Britain  — 1862-1883. 


£2,333,523 

£165,562 

£127,749 

2,673,778 

216,005 

167,620 

- 

- 

- 

- 

- 

2,836,606 

224,460 

163,147 

_ 

_ 

_ 

_ 

_ 

3,373,847 

279,226 

181,766 

_ 

_ 

_ 

_ 

_ 

4,462,676 

372,307 

219,746 

_ 

_ 

_ 

_ 

_ 

6,001,153 

398,578 

255,923 

£583,539 

c  £494,429 

_ 

£3,203 

£32,629 

7,122,360 

424,420 

294,451 

671,165 

137,397 

£166,398 

3,636 

33,109 

7,353,363 

438,101 

280,116 

784,847 

117,586 

178,367 

3,814 

38,630 

8,201,685 

553,435 

311,910 

912,102 

126,736 

204,876 

4,275 

52,990 

9,463,771 

666,399 

346,415 

1,029,446 

145,004 

262,594 

5,097 

66,631 

12,992,345 

935,551 

477,846 

1,383,063 

318,477 

382,846 

6,696 

93,601 

15,623,553 

1,109,795 

555,766 

1,627,402 

370,402 

449,039 

7,107 

102,722 

16,358,278 

1,227,226 

593,548 

1,781,053 

418,301 

522,081 

7,949 

116,829 

18,484,382 

1,427,365 

685,118 

2,094,325 

667,825 

553,454 

10,879 

241,930 

19,909,699 

1,742,501 

1,279,392 

2,664,042 

_ 

_ 

_ 

_ 

21,374,013 

1,922,361 

1,381,285 

2,647,309 

_ 

_ 

_ 

_ 

21,385,646 

1,836,371 

1,493,842 

2,609,729 

- 

. 

_ 

_ 

20,365,602 

1,856,308 

1,536,282 

2,857,214 

_ 

_ 

_ 

_ 

23,231,677 

b  1,866,839 

1,428,303 

2,878,832 

d  3,429,935 

17,407 

13,910 

_ 

24,926,005 

1,979,576 

_ 

3,051,665 

_ 

_ 

13,822 

_ 

26,573,551 

2,106,958 

1,625,170 

3,279,374 

4,085,871 

_ 

14,730 

_ 

28,065,809 

2,317,150 

1,726,487 

3,194,875 

4,388,545 

~ 

15,754 

~ 

d  The  return  states  this  sum  to  be  investments  other  than  in  trade,  which  may  mean  invest- 
ments in  the  wholesale  societies,  corn  mills,  joint  stock  companies,  building  departments,  banks, 
mortgages,  loans,  etc. 


54 


A  MANUAL  OF 


Statistics  of  Co-operative  Societies 


NUMBER  OF  SOCIETIES. 

CAPITAL  AT  END  OF  YEAR. 

Number 

YEAR. 

Registered 
in  the  year. 

Not  making 
Returns. 

Making 
Returns. 

of 
Members. 

Share. 

Loan. 

1862 
1863 

a  454 
51 

68 
73 

332 
381 

90,341 
111,163 

£428,376 
579,902 

£54,499 
76,738 

1864 

146 

110 

394 

129,429 

684,182 

89,122 

1865 

101 

182 

403 

124,659 

819,367 

107,26a 

1866 

163 

240 

441 

144,072 

1,046,310 

118,023 

1867 

137 

192 

577 

171,897 

1,475,199 

136,734 

1868 

190 

93 

673 

211,781 

1,711,643 

177,706 

1869 

65 

133 

754 

229,861 

1,816,672 

179,054 

1870 

67 

153 

748 

248,108 

2,035,626 

197,029 

1871 

56 

235 

746 

262,188 

2,305,951 

215,453 

1872 

113 

66 

749 

301,157 

2,786,965 

344,509 

1873 

186 

69 

790 

340,930 

3,344,104 

431,808 

1874 

113 

177 

810 

357,821 

3,653,582 

498,052 

1875 

98 

237 

926 

420,024 

4,470,857 

742,073 

1876 

72 

113 

937 

444,547 

4,825,642 

774,809 

1877 

58 

186 

896 

461,666 

5,092,958 

916,955 

1878 

48 

65 

963 

490,584 

5,264,855 

965,499 

1879 

40 

106 

937 

504,117 

5,374,179 

1,324,970 

1880 

53 

62 

953 

526,686 

5,806,545 

1,124,795 

1881 

50 

- 

971 

552,353 

6,431,553 

1,205,145 

1882 

51 

71 

900 

566,338 

6,794,624 

1,150,006 

1883 

42 

150 

870 

576,477 

6,871,590 

1,165,956 

a  The  total  number  registered  to  December  31, 1862. 

b  Estimated  on  the  basis  of  the  returns  made  to  the  Central  Co-operative  Board  for  1881. 

c  Includes  joint  stock  companies. 


Statistics  of  Co-operative- Societies 


1872 

25 

38 

178 

38,829 

£181,793 

£27,022 

1873 

39 

66 

188 

46,371 

235,858 

64,932 

1874 

15 

50 

216 

54,431 

250,026 

88,920 

1875 

.  18 

46 

237 

59,260 

323,052 

102,547 

1876 

10 

57 

228 

63,310 

314,577 

144,953 

1877 

8 

54 

248 

66,910 

345,001 

156,310 

1878 

4 

54 

218 

70,119 

381,028 

180,208 

1879 

11 

a  40 

208 

68,967 

373,728 

171,173 

1880 

14 

38 

224 

76,855 

417,726 

216,395 

1881 

12 

9 

259 

90,430 

505,731 

278,438 

1882 

_ 

37 

245 

87,700 

494,735 

313,935 

1883 

— 

1 

275 

102,817 

587,549 

358,285 

a  Estimated. 


Statistics  of  Co-operative  Societies 


1872 

3 

9 

8 

564 

£1,815 

£10 

1873 

1 

3 

5 

464 

1,443 

90 

1874 

2 

5 

5 

481 

1,485 

370 

1875 

1 

2 

7 

792 

9,638 

5,370 

1876 

_ 

7 

2 

210 

1,171 

10 

1877 

1 

6 

4 

505 

7,490 

10 

1878 

2 

4 

290 

1,560 

10 

1879 

1 

6 

537 

7,615 

200 

1880 

2 

_ 

6 

522 

7,822 

100 

1881 

4 

_ 

10 

834 

2,889 

_ 

1882 

_ 

11 

1,007 

9,082 

100 

1883 

*" 

— 

8 

871 

8,710 

100 

DISTRIBUTIVE  CO-OPERATION. 


55 


in  England  and  Wales  — 1862-1883. 


CAPITAL  INVESTED  IN  — 

Sales. 

Net  Profit. 

Trade 
Expenses. 

Trade 
Stock. 

Industrial  and 
Provident 
Societies,  and 

Joint 
Stock 

Profit  de- 
voted to 
Education. 

Amount 
of 
Keserve 

Sources  other 

Compa- 

Fund. 

than  Trade. 

nies. 

£2,333,523 

£165,562 

£127,749 

_ 

_ 

_ 

_ 

_ 

2,673,778 

216,005 

167,620 

_ 

— 

_ 

_ 

— 

2,836,606 

224,460 

163,147 

_ 

_ 

_ 

_ 

_ 

3,373,847 

279,226 

181,766 

_ 

_ 

_ 

- 

- 

4,462,676 

372,307 

219,746 

_ 

_ 

_ 

_ 

_ 

6,001,153 

398,578 

255,923 

£583,539 

c  £494,429 

_ 

£3,203 

£32,629 

7,122,360 

424,420 

294,451 

671,165 

137,397 

£168,398 

3,636 

33,109 

7,353,363 

438,101 

280,116 

784,847 

117,586 

178,367 

3,814 

38,630 

8,201,685 

553,435 

311,910 

912,102 

126,736 

204,876 

4,275 

52,990 

9,463,771 

666,399 

346,415 

1,029,446 

145,004 

262,594 

5,097 

66,631 

11,397.225 

809,237 

419,567 

1,219,092 

300,712 

380,043 

6,461 

79,292 

13,651,127 

959,493 

488,464 

1,439,137 

337,811 

443,724 

6,864 

83,149 

14.295,762 

1,072,139 

517,445 

1,572,264 

386,640 

510,057 

7,486 

98,732 

16,206,570 

1,250,570 

598,080 

1,852,437 

630,400 

538,140 

10,454 

220,011 

17,619,247 

1,541,384 

1,137,053 

2,377,380 

_ 

_ 

_ 

_ 

18,697,788 

1,680,370 

1,222,664 

2,310,041 

_ 

_ 

_ 

_ 

18,719,081 

1,583,925 

1,315,364 

2,286,795 

_ 

_ 

_ 

_ 

17,816,037 

1,598,156 

1,353,832 

2,486,704 

_ 

_ 

_ 

_ 

20,129,217 

b  1,600,000 

1,285,875 

2,512,039 

d  3,226,370 

_ 

13,262 

_ 

21,276,850 

1,657,564 

_ 

2,585,443 

_ 

_ 

13,314 

_. 

22,839,728 

1,784,454 

1,442,585 

2,818,950 

3,729,675 

_ 

14,039 

__ 

23,583,503 

1,926,488 

1,516,800 

2,727,146 

4,012,083 

- 

14,869 

-- 

d  The  return  states  this  sum  to  be  investments  other  than  in  trade,  which  may  mean  invest- 
ments in  the  wholesale  societies,  corn  mills,  joint  stock  companies,  building  departments,  banks» 
mortgages,  loans,  etc. 


in  Scotland  — 1872-1883. 


£1,595,120 
1,972,426 

£126,314 
150,302 

£58,279 
67,302 

£163,971 
188,265 

£17,765 
32,591 

£2,803 
5,315 

£235 
243 

£14,309 
19,573 

2,062,516 
2,277,812 

155,087 
176,795 

76,103 
87,038 

208,789 
241,888 

31,661 
31,425 

12.024 
15^314 

463 
425 

18,097 
21,919 

2,290,452 

201,117 

142,339 

286,662 

2,676,225 

241,991 

158,621 

337,268 

_ 

_ 

_ 

_ 

2,666,565 

252,446 

178,478 

322,934 

_ 

_ 

_ 

2,549,565 

258,152 

182,450 

370,510 

_ 

_ 

™ 

3,102,460 

266,839 

142,428 

366,793 

203,565 

17,407 

648 

3,649,155 

322,012 

_ 

466,222 

508 

3,733,823 

322,504 

182,585 

462,424 

356,196 

_ 

691 

_ 

4,482,306 

390,662 

209,687 

467,729 

376,462 

- 

885 

- 

in  Ireland  — 1872-1883. 


£19,775 

£1,164 

£1,284 

16,161 

863 

774 

_ 

15,775 

812 

907 

_ 

15,519 
11,355 

1,725 
1,479 

1,060 
464 

£1,350 

- 

~ 

- 

- 

£67 

16,434 

2,190 

676 

973 

~ 

16,573 

1,289 

765 

_ 

_ 

15 

17,170 
16,637 

1,482 
1,760 

856 

857 

1,244 

£5 

- 

£45 

71 

19,058 

1,533 

1,039 

1,668 

8 

3 

24,744 

1,540 

1,758 

1,812 

23,501 

1,782 

1,388 

1,585 

7,241 

- 

- 

- 

56 


A  MANUAL  OF 


The  preceding  tables  show  that  in  the  United  Kingdom  since 
1862  the  number  of  societies,  including  those  making  and 
those  not  making  returns,  has  risen  from  400  to  1304,  an  in- 
crease of  226  per  cent,  while  the  membership  based,  upon  the 
returns  has  risen  from  90,341  to  680,165,  an  increase  of 
652+  per  cent.  During  this  time  the  total  sales  amount  to 
£303,326,024,  and  the  totat  net  profit  to  £24,084,113;  the 
latter  amount  representing  capital  saved  to  the  members  by  this 
mode  of  trading,  it  being  the  sum  divided  among  members 
since  1862. 

It  will  be  seen  that  considerable  amounts  have  been  invested, 
devoted  to  educational  purposes,  etc. 

The  tables  show  that  the  co-operative  movement  has  not 
made  uniform  progress  in  all  parts  of  the  Kingdom.  England 
and  Wales  contain  the  largest  proportion  of  the  societies ; 
Scotland  stands  next,  while  in  Ireland  the  movement  is  yet  in 
its  infancy.  Beginning  with  the  year  1872  comparisons  may 
be  made  showing  the  progress  in  each  division  of  the  United 
Kingdom,  and  for  this  purpose  we  present  the  following  tables  : 

Co-operation  in  England  and   Wales  — 1872-1883. 


CLASSIFICATION. 

1872 

1883 

Percentage  of 

Increase. 

Societies  making  returns,    

749 

870 

16.2 

Number  of  members,  

301,157 

576,477 

91.4 

Capital,  share  and  loan,       

£3,131,474 

£8,037,546 

156.6 

Sales,     ......... 

11,397,225 

23,583,503 

106.9 

Profits  

809,237 

1,926,488 

138.0 

Devoted  to  education,  .        ... 

5,097 

14,869 

191.7 

Co-operation  in  Scotland— 1872-1883. 


178 

275 

54.4 

Number  of  members,  

38,829 
£208,815 

102,817 
£945,834 

164.7 

352.9 

Sales  
Profits,  .  '.  

1,595,120 
126,314 
235 

4,482,306 
390,662 
885 

181.0 
209.2 
276.5 

Co-operation  in  Ireland  — 1872-1883. 


Societies  making  returns  

8 
564 

8 
871 

54.4 

£1,825 

£8,810 

382.7 

19,775 

23,501 

18.8 

1,164 

1,782 

53.0 

Devoted  to  education,  

DISTRIBUTIVE  CO-OPERATION.  57 

These  tables  show  in  England  and  Wales,  from  1872  to 
1883,  an  increase  of  16.2  per  cent  in  number  of  societies  and 
91.4  per  cent  in  membership.  Capital  increased  156.6  per 
cent ;  sales  106.9  per  cent,  and  profits  138.0  per  cent.  The  rate 
of  progress  in  Scotland,  it  appears,  is  greater  than  that  in  Eng- 
land and  Wales,  the  increase  in  societies  in  that  country  being 
54.4  per  cent;  in  membership  164.7  per  cent;  in  capital, 
352.9  per  cent;  in  sales,  181.0  per  cent;  and  in  profits  209.2 
per  cent.  The  progress  in  Ireland  is  comparatively  slight. 

It  has  been  estimated  that  the  membership  of  the  societies 
must  be  quadrupled  if  we  would  arrive  at  the  total  population 
connected  with  the  movement.  This  would  give  a  total  of 
2,720,660  for  the  year  1883.  In  the  northwest  of  England, 
especially,  the  movement  has  great  strength,  and  it  has  been 
stated  that  in  this  section  at  least  one-fourth  of  the  population 
in  the  larger  towns  procure  their  supplies  from  co-operative 
stores,  and  that  this  is  true  also  of  the  entire  counties  of  Dur- 
ham and  Northumberland. 

It  is  interesting  to  note  that  the  average  amount  of  sales  to 
each  member,  which  in  1862  was  £25.83,  has  in  1883  become 
£41.31.  The  ratio  of  expenses  to  members  has  considerably 
increased  also,  the  average  in  1862  being  £1.41  to  each  mem- 
ber, and  in  1883,  £2.54.  The  average  net  profit  to  each  mem- 
ber has  nearly  doubled,  it  being  £1.83  in  1862  and  £3.41  in 
1883.  The  percentage  of  net  profit  upon  share  and  loan  capi- 
tal was  34.2+  in  1862,  and  25.7+  in  1883. 

The  following  table,  showing  the  sales  of  all  general  dis- 
tributive societies  on  the  Rochdale  plan  which  during  the 
years  -1866  to  1883  exceeded  £200,000  a  year,  exhibits  the 
progress  of  the  larger  stores  and  the  strength  of  the  movement 
in  various  localities : 


58 


A  MANUAL  OF 


Co-operative  Societies  with  Sales: 


NAMES  OF  SOCIETIES. 

COUNTIES. 

1866 

1867 

£ 

£ 

1 

2 
3 

Rochdale  Equitable  Pioneers, 
Co-operative  Wholesale  Society,  . 
Halifax  Industrial, 

Lancashire, 
Lancashire, 
Yorkshire, 

249,122 

283,942 
331,744 

4 

Leeds  Industrial  and  Corn  Mill,  . 

Yorkshire, 

_ 

_ 

5 

Oldham  Industrial, 

Lancashire, 

_ 

_ 

6 

Lancashire, 

Totals  

249,122 

615,686 

NAMES  OF  SOCIETIES. 

COUNTIES. 

1875 

1876 

1 

2 
3 
4 
5 
6 

8 

Rochdale  Equitable  Pioneers, 
Co-operative  Wholesale  Society,  . 
Halifax  Industrial,         .... 
Leeds  Industrial  and  Corn  Mill,  . 
Oldham  Industrial,        .... 
Bury  District,         
Manchester  Equitable,  .... 
Bolton,     

Lancashire,     . 
Lancashire, 
Yorkshire, 
Yorkshire, 
Lancashire, 
Lancashire, 
Lancashire, 
Lancashire, 

£ 
305,657 
2,247,395 
270,499 
390,645 
253,438 
212,814 

£ 
305,191 
2,697,366 
237,754 
365,639* 
284,977 
231,692 

9 
10 
11 
T> 

Gateshead,      
Barnsley  British,    
Oldham  Equitable  
Huddersfield           . 

Durham, 
Yorkshire, 
Lancashire, 
Yorkshire, 

_ 

_ 

13 

Newcastle-upon-Tyne  

Northumberland  , 

- 

- 

Totals  

3,680,448 

4,122,619 

There  were  also  in  the  year  1883  twenty-two  general  dis- 
tributive societies  on  the  Eochdale  plan  whose  sales  were  over 
£100,000  and  under  £200,000.  Five  of  these  were  in  Lan- 
cashire, six  in  Yorkshire,  five  in  Durham,  and  one  each  in  the 
counties  of  Northumberland,  Cumberland,  Chester,  Leicester,. 
Devon,  and  Derbyshire. 


DISTRIBUTIVE  CO-OPERATION. 


59 


exceeding  £200,000  yearly. 


1868 

1889 

1870 

1871 

1872 

1873 

1874 

£ 

£ 

£ 

£ 

£ 

£ 

£ 

290,540    . 

236,439 

222,138 

246,674 

267,572 

287,212 

298,889 

1 

412,240 

507,217 

677,734 

758,764 

1,153,132 

1,636,950 

1,964,829 

2 

_ 

_ 

_ 

_ 

235,730 

264,137 

273,186 

a 

_ 

_ 

_ 

_ 

- 

312,308 

380,536 

4 

_ 

_ 

_ 

_ 

_ 

213,600 

237,845 

5 

- 

- 

- 

- 

- 

209,382 

223,622 

6 

702,780 

743,656 

899,872 

1,005,438 

1,656,434 

2,923,589 

3,384,907 

1877 

1878 

1879 

1880 

1881 

1882 

1883 

£ 

£ 

£ 

£ 

£ 

£ 

£ 

311,715 

299,039 

270,070 

283,655 

272,141 

274,627 

276,457 

1 

2,827,052 

2,705,625 

2,645,331 

3,339,681 

3,574,095 

4,038,238 

4,546,891 

2 

237,447 

209,571 

_ 

207,539 

_ 

_ 

206,058 

3 

374,166 

358,865 

360,017 

412,225 

432,811 

438,478 

486,784 

4 

316,903 

279,999 

261,813 

303,012 

310,387 

320,336 

335,672 

5 

251,057 

241,886 

217,282 

231,918 

225,689 

240,227 

250,123 

6 

— 

— 

208,513 

242,966 

242,535 

254,124 

258,935 

7 

' 

- 

- 

- 

219,657 

254,414 

295,437 

8 

- 

- 

_ 

_ 

200,261 

225,202 

248,364 

9 

- 

- 

- 

- 

- 

215,421 

253,512 

10 

- 

- 

- 

— 

_ 

210,581 

235,678 

11 

_ 

_ 

_ 

_ 

_ 

201,718 

208,710 

12 

. 

- 

- 

- 

- 

- 

239,877 

13 

4,318,340 

4,094,985 

3,963,026 

5,020,996 

5,477,576 

6,673,366 

7,842,498 

We  now  present  statistics  showing  the  progress  and  present 
condition  of  the  great  English  Wholesale  Society.*  The  follow- 
ing table  exhibits  its  progress  from  its  commencement  in  March, 
1864,  to  June,  1885  : 


*  Corporate  name,  Co-operative  Wholesale  Society,  Limited. 


60 


A  MANUAL  OF 


Progress  of  the  English  Wholesale  Society 


No.  of 

CAPITAL. 

YEAR  ENDING  — 

Departments   and 
Branches  added. 

£5 
shares 
taken 
up. 

mem- 
bers be- 
longing 
to  share- 
holders. 

Shares. 

Loans 
and  De- 
posits. 

Trade 
and 
Bank 
Reserve 
Fund. 

October,      1864  (30  weeks) 

_                   _ 

_ 

18,337 

£ 
2,455 

£ 

£ 

October,      1865    . 

- 

- 

24,005 

7,182 

1-3  1 

_ 

October,      1866    . 

Tipperary. 

- 

31,030 

10,968 

1     « 

82 

January,     1868  (65  weeks) 

- 

- 

59,349 

11,276 

14,355 

682 

January,     1869    . 

Kilmallock. 

- 

74,737 

14,888 

16,059 

1,115 

January,     1870    . 

Limerick. 

- 

79,245 

16,556 

22,822 

1,280 

January,     1871  (53  weeks) 

- 

- 

89,880 

19,015 

22,323 

2,826 

January,     1872    . 

Newcastle. 

5,835 

114,588 

24,410 

25,768 

1,910 

January,     1873    . 

Manchester  boot  and 
shoe;  Crumpsall. 

6,949 

134,276 

31,352 

112,589 

2,916 

January,     1874    . 

Armagh;   Manchester 
drapery;  Leicester; 
Cheshire;  Water- 
ford;  Clonmel. 

13,899 

168,985 

48,126 

147,949 

1,613 

January,     1875    . 

London  ;  Tralee  ;  Dur- 
ham. 

17,326 

198,608 

60,930 

193,594 

5,373 

January,     1876    . 

Liverpool. 

22,254 

249,516 

78,249 

286,614 

8,910 

January,     1877  (53  weeks) 

New     York  ;      Goole 
furnishing;        S.  8. 
'  '  Plover  '  '    purchas- 
ed; Cork. 

24,717 

276,522 

94,590 

299,287 

12,631 

January,     1878    . 

24,979 

274,649 

103,091 

287,536 

14,554 

January,     1879    . 

- 

28,206 

305,161 

117,657 

291,939 

16,245 

December,  1879  (50  weeks) 

Launch  of  S.  S.  "Pio- 
neer;"    Rouen; 
Goole   forwarding 
depot. 

30,688 

331,625 

130,615 

321,670 

25,240 

December,  1880    . 

Heckmondwike. 

33,663 

361,523 

146,061 

361,805 

38,422 

December,  1881    . 

Copenhagen;  Pur- 
chase of  S.S.  "Cam- 
brian." 

34,351 

367,973 

156,052 

386,824 

16,037 

December,  1882    . 

Tea  and  coffee  depart- 
ment, London. 

38,643 

404,006 

171,940 

416,832 

20,757 

December,  1883    .        ... 

Purchase   of  S.  S. 
"Marianne  Briggs." 

41,783 

433,151 

186,692 

455,879 

20,447 

December,  1884  (53  weeks) 

Hamburg;    Bristol; 
S.  8.  "Progress." 

45,099 

459,734 

207,080 

494,840 

25,126 

June,           1885  (26  weeks) 

- 

49,393 

491,000 

225,822 

510,529 

28,268 

See  note  on  page  73,  post. 


DISTRIBUTIVE  CO-OPERATION. 


61 


from  March,  1864,  to  June,  1885* 


CAPITAL.  —  Con. 

Net  Sales. 

COMPARISON 

WITH  PREVIOUS 
TEAR. 

DISTRIBUTIVE 

EXPENSES. 

Net  Profit. 

Aver- 
age divi- 
dend 
paid  per 
£. 

Trans- 
ferred to 
Reserve 
and  Insur- 
ance 
Funds. 

Insur- 
ance 
Fund. 

Reserv- 
ed Ex- 
penses. 

Total. 

Increase. 

Per- 
cent- 
age. 

Amount. 

Hate 
per£ 
on 
Sales. 

£ 

£ 

2,455 

£ 
51,857 

£ 

_ 

£ 
347 

!%• 

267 

d. 
W* 

£ 

- 

- 

7,182 

120,754 

- 

- 

906 

IX, 

1,858 

zy* 

- 

- 

- 

11,050 

175,489 

54,735 

45^ 

1,615 

2% 

2,310 

3 

234 

- 

- 

26,313 

.   331,744 

112,688 

51% 

3,135 

2^ 

4,411 

3 

450 

- 

- 

32,062 

412,240 

124,063 

43 

3,338 

1% 

4,862 

2% 

416 

- 

- 

40,658 

507,217 

94,977 

23 

4,644 

2^ 

4,248 

UK 

542 

- 

- 

44,164 

677,734 

159,379 

30^ 

5,583 

1% 

7,626 

2^ 

1,620 

- 

- 

52,088 

758,764 

86,559 

12% 

6,853 

2X 

7,867 

2^ 

1,036 

- 

- 

146,857 

1,153,132 

394,368 

51% 

12,811 

2^ 

11,116 

2^ 

3,243 

2,356 

- 

200,044 

1,636,950 

483,818 

41% 

21,147 

3 

14,233 

2 

922 

3,385 

- 

263,282 

1,964,829 

327,879 

20 

28,436 

3% 

20,684 

2 

5,461 

5,834 

- 

379,607 

2,247,395 

282,566 

14% 

31,555 

3% 

26,750 

2% 

7,826 

10,843 

634 

417,985 

2,697,366 

401,095 

17% 

42,436 

3& 

36,979 

2% 

4,925 

12,556 

788 

418,525 

2,827,052 

188,897 

7% 

43,169 

3% 

29,189 

2 

579 

15,127 

1,146 

442,114 

2,705,625 

•(•121,427 

t*# 

43,093 

3% 

34,959 

2^ 

5,970 

15,710 

1,095 

494,330 

2,645,331 

22,774 

0% 

41,309 

3% 

42,764 

2^ 

8,060 

17,905 

1,661 

565,854 

3,339,681 

611,282 

22% 

47,153 

3% 

42,090 

2% 

10,651 

18,644 

2,489 

580,046 

3,574,095 

234,414 

7 

51,306 

3% 

46,850 

2% 

7,672 

19,729 

2,945 

632,203 

4,038,238 

464,143 

12% 

57,340 

3% 

49,658 

2% 

3,416 

21,949 

6,214 

691,181 

4,546,889 

508,651 

12% 

66,057 

3% 

47,885 

2^ 

'    3,176 

24,324 

9,988 

761,358 

4,675,371 

41,042 

0% 

70,343 

3K 

54,491 

2% 

6,431 

27,310 

6,496 

798,425 

2,242,242 

131,116 

6% 

36,846 

3% 

38,787 

3% 

7,527 

t  Decrease. 


62  A  MANUAL  OF 

The  total  amount  of  sales  shown  in  the  foregoing  table  is 
£43,329,995,  while  the  expenses  reach  the  total  of  £619,422, 
the  rate  of  expenses  per  £  on  total  sales  being  3|  per  cent. 
The  net  profits  amount  to  £529,884,  affording  an  average  divi- 
dend per  £  of  2|cL  The  total  amount  transferred  to  the 
reserve  and  insurance  funds  is  £80,157.  The  figures  show 
conclusively  the  financial  prosperity  of  this  society  and  indi- 
cate so  far  as  can  be  done  by  aggregates  the  volume  of  busi- 
ness transacted.  In  certain  staples  the  trade  is  very  large. 
For  instance,  the  shipments  of  Irish  butter  for  the  year  ending 
June,  1885,  amounted  to  116,168  firkins,  the  total  weight  of 
this  article  sold  in  the  single  quarter  ending  June  27,  1885, 
being  15^577  cwts.  ;  and  besides  this  31,977  cwts.  of  other 
foreign  butter  was  disposed  of. 

The  value  of  tea  sold  for  the  year  ending  June,  1885,  was 
£249,228;  and  of  coffee,  £36,457. 

The  business  of  the  society  is  still  increasing.  Comparing 
the  quarter  ending  June  27,  1885,  with  the  corresponding 
period  in  the  previous  year,  and  the  net  value  of  goods  in- 
creased 5|  per  cent;  the  total  capital  —  shares,  loans,  deposits, 
reserves,  and  insurance,  —  9J  per  cent;  the  number  of  mem- 
bers belonging  to  the  shareholding  societies,  10  per  cent ;  the 
number  of  societies  holding  shares,  5|  per  cent ;  and  the  num- 
ber of  societies  supplied  with  goods,  5|  per  cent.  On  the  27th 
of  June,  1885,  the  nominal  value  of  land  held  by  the  society 
was  about  £83,624;  of  buildings,  £109,692,  and  of  steam- 
ships, £30,070. 

In  October,  1884,  the  total  number  of  employes  in  the  ser- 
vice of  the  society  was  1,570,  of  whom  about  one-half,  or  771, 
were  engaged  in  the  Leicester  shoe  works.  One  hundred  and 
thirty-two  were  employed  in  the  shoe  works  at  Heckmond- 
wike  ;  258  in  the  Manchester  departments  ;  106  at  Newcastle, 
and  the  others  at  the  various  branches  and  upon  the  steam- 
ships. 

When  we  remember  that  this  institution  rests  entirely  upon 
capital  invested  by  workingmen,  and  largely  upon  capital 
saved  through  co-operative  trade,  these  statistics  afford  conclu- 
sive evidence  of  the  soundness  of  the  principles  upon  which 
co-operative  distribution  rests,  and  of  the  clear  business  insight 


DISTRIBUTIVE  CO-OPERATION. 


63 


possessed   by  those  who   have   controlled   the   affairs  of   the 
society. 

Although  the  Scottish  Wholesale  Society  is  a  much  smaller 
institution,  its  record  is  also  highly  successful.  We  close  our 
statistical  abstract  with  a  table  showing  its  growth  to  the  close 
of  the  year  1883  : 

Progress  of  the  Scottish  Wholesale  Society. 


INCREASE  OF   SALES 

OVER  CORRESPOND- 

Members in 

Share  and 

Reserve 

ING  PERIOD  OF  PRE- 
VIOUS YEAR. 

TEARS. 

Shareholding 

Loan  Capi- 

Funds. 

Sales. 

Societies. 

tal. 

Amount. 

Per- 
centage. 

£ 

£ 

£ 

£ 

1869 

_ 

4,246 

90 

64,484 

- 

1870 

_ 

11,221 

398 

104,929 

40,445 

62 

1871 

_ 

16,177 

932 

135,872 

30,943 

29 

1872 

16,723 

25,820 

1,429 

228,074 

92,202 

67 

1873 

20,496 

46,862 

1,792 

361,856 

133,782 

58 

1874 

24,496 

43,251 

2,199 

417,586 

55,730 

15 

1875 

27,029 

54,388 

2,375 

412,010 

*5,576 

*1 

1876 

28,999 

63,386 

2,675 

440,757 

28,747 

6 

1877 

30,538 

68,117 

3,217 

554,890 

114,133 

25 

1878 

33,934 

80,028 

3,357 

603,906 

49,016 

8 

1879 

35,768 

85,554 

3,983 

611,626 

7,720 

1 

1880 

40,798 

101,335 

7,727 

789,506 

177,880 

29 

1881 

48,097 

122,864 

10,407 

937,828 

148,322 

18 

1882 
1883 

52,610 
57,252 

153,575 
174,413 

11,370 
13,678 

1,080,658 
1,202,998 

142,830 
122,340 

15 
11 

*  Decrease. 


THE  CO-OPERATIVE  UNION. 

The  co-operative  societies  are  bound  together  by  the  organi- 
zation of  the  Co-operative  Union.  This  organization  affords 
moral  support  to  the  societies,  and  through  its  executive,  the 
Central  Co-operative  Board,  is  an  effective  agency  in  pro- 
moting their  welfare,  and  an  invaluable  aid  in  disseminating 
information  respecting  the  movement  and  in  promoting  the  ex- 
tension of  co-operative  work. 

By  its  constitution  the  Union  declares  its  purpose  to  be  « '  the 
promotion  of  the  practice  of  truthfulness,  justice,  and  economy 
in  production  and  exchange."  It  proposes  to  effect  this  pur- 
pose : 

"  (1)  By  the  abolition  of  false  dealing,  either  —  a.  Direct,  by 
representing  any  article  produced  or  sold  to  be  other  than  what  it  is 
known  to  the  producer  or  vendor  to  be ;  or,  b.  Indirect,  by  con- 


64  A  MANUAL  OF 

cealing  from  the  purchaser  any  fact  known  to  the  vendor  material 
to  be  known  by  the  purchaser,  to  enable  him  to  judge  of  the  value 
of  the  article  purchased. 

(2)  By  conciliating  the  conflicting  interests  of  the  capitalist,  the 
worker,  and   the  purchaser,   through   an   equitable  division  among 
them  of  the  fund  commonly  known  as  profit. 

(3)  By  preventing  the  waste  of  labor  now  caused  by  unregu- 
lated competition." 

This  platform  is  broad  and  far  reaching  in  its  scope.  It  not 
only  comprehends  all  that  has  yet  been  accomplished  by  the 
co-operative  societies,  but  includes  all  that  the  ardent  co-opera- 
tor hopes  to  see  realized  in  tbe  future.  It  seeks  a  division  of 
profit  not  only  among  consumers,  but  among  capitalists  and 
workers  also,  and  aims,  as  co-operative  advocates  generally 
do,  at  restricting  competition. 

The  Union  is  open  to  all  industrial  and  provident  societies, 
friendly  or  building  societies,  trade  unions  or  associations, 
joint  stock  companies  or  industrial  partnerships,  provided 
always  that  such  societies  or  associations  accept  the  statement 
of  principles  enunciated  by  the  Union  and  agree  to  be  guided 
by  tbem  in  business  transactions,  and  agree  : 

"  To  contribute  to  the  Congress  fund  an  annual  subscription,  at  the 
rate  of  2cZ.  for  each  member,  or,  in  the  case  of  industrial  partner- 
ships, each  employe,  up  to  500.  Contributions  on  any  larger  num- 
ber of  members  give  the  controlling  body,  for  each  additional  500 
members,  or  fraction,  for  whom  it  pays  at  the  rate  above  mentioned, 
the  right  to  send  an  additional  delegate  to  the  annual  Congress,  by 
which  the  Union  is  governed." 

The  Central  Board,  as  tbe  executive  of  the  Union,  is  pre- 
pared to  give  legal  and  general  advice  to  the  societies  in  mat- 
ters affecting  their  interests.  It  is  also  a  statistical  bureau 
collecting  and  collating  information  for  their  benefit,  and, 
lastly,  it  is  a  propagandist  agency  aiming  to  disseminate  co- 
operative principles  especially  in  tbe  United  Kingdom  but 
generally  throughout  the  world. 

In  the  co-operative  organization  the  societies  are  grouped  in 
sections,  of  which  there  are  six,  viz :  Midland,  Northern, 
North- Western,  Scottish,  Southern,  and  Western.  Each  of 


DISTEIBUTIVE  CO-OPERATION.  65 

these  sections  contains  approximately  the  following  number  of 
societies : 

Midland,  196  ;  Northern,  133  ;  North- Western,  437  ;  Scot- 
tish, 295  ;  Southern,  152  ;  and  Western,  66.  These  returns 
include  36  productive  societies,  exclusive  of  the  productive 
departments  of  the  wholesale  society.  The  societies  in  Ireland 
are  attached  to  the  North-Western  section.  The  sections,  with 
the  exception  of  the  Western,  are  each  sub-divided  into  con- 
ference districts,  the  number  of  such  districts  in  each  section 
being  as  follows  :  Midland,  9  ;  Northern,  7  ;  North-Western, 
15  ;  Scottish,  10 ;  and  Southern,  9. 

Besides  the  general  Congress  of  the  Union,  held  annually, 
and  composed  of  delegates  from  the  societies  in  fellowship, 
local  conferences  are  held  in  the  various  conference  districts 
for  the  discussion  of  subjects  in  interest. 

The  affairs  of  each  section  are  managed  by  local  councils 
annually  elected  by  ballot  by  the  societies  in  the  sections  re- 
spectively. These  councils  have  the  following  number  of 
members:  Midland,  9;  Northern,  7;  North-Western,  11; 
Scottish,  10;  Southern,  9;  and  Western,  7.  These  councils 
united  constitute  the  Central  Board. 

The  executive  committee  of  the  Central  Board  is  termed  the 
United  Board,  and  consists  of  two  representatives  from  each 
local  council,  except  the  North-Western,  which  has  three,  and 
the  Western,  which  has  one. 

The  Central  Board  in  its  entirety  meets  twice  each  year, 
once  just  prior  to  the  assembling  of  the  Congress  and  once 
immediately  after  the  appointment  of  a  new  Board.  The 
United  Board  meets  three  times  each  year,  at  Manchester. 
The  executive  of  the  United  Board  is  termed  an  office  com- 
mittee, and  its  members  are  appointed  from  the  general  body 
by  the  Central  Board  at  its  "first  meeting  in  the  year.  Attached 
to  the  United  Board  is  a  paid  staff  comprising  a  secretary, 
assistant  secretary,  bookkeeper,  and  clerks. 

The  members  of  the  several  Boards  and  councils  are  paid 
travelling  and  other  necessary  expenses  incurred  in  the  per- 
formance of  their  duties. 

The  conference  districts  of  the  sections  are  variously  organ- 
ized ;  some  have  a  chairman,  secretary,  and  committee ;  others 


66  A  MANUAL  OF 

have  in  addition  a  statistical  secretary ;  others  have  a  secretary 
only,  while  a  few  have  no  officers. 

At  the  Congresses  reports  are  presented  upon  the  condition 
of  the  societies  in  the  various  sections,  papers  are  read  upon 
co-operative  subjects,  and  the  usual  discussions  ensue.  The 
Congresses  are  opened  by  an  inaugural  address  by  some  person 
of  eminence,  and  it  is  customary  to  listen  to  a  sermon  from 
some  noted  divine.  The  rules  of  the  Congress  provide  for 
meetings  upon  two  days  only,  but  it  is  now  usual  to  prolong 
the  sessions  to  three  days. 

Among  others,  the  following  subjects  have  been  discussed : 
The  law  relating  to  co-operation ;  associated  homes ;  co- 
operative banking ;  methods  of  voting  and  auditing  in 
co-operative  societies,  and  the  best  methods  of  managing  such 
societies ;  co-operative  cottage  building ;  education  in  connec- 
tion with  co-operation ;  credit ;  land  and  agriculture ;  bonus 
or  profit  sharing ;  prospects  of  co-operation  ;  policy  of  high 
dividends ;  propagation  and  organization  in  the  co-operative 
movement ;  surplus  capital ;  trade  unions ;  transferable  or 
withdrawable  shares ;  workingmen's  clubs ;  co-operative  jour- 
nalism ;  co-operative  production  ;  a  labor  exchange  ;  industrial 
partnerships,  and  wholesale  distribution. 

Addresses  have  been  delivered  by  Thomas  Hughes,  Q.  C.  M.P. , 
W.  Morrison,  M.P.,  Hon.  Auberon  Herbert,  M.P.,  Joseph 
Cowen,  M.P.,  Sir  Thomas  Brassey,  M.P.,  Prof.  Thorold 
Kogers,  M.P.,  Prof.  Hodgson,  The  Marquis  of  Ripon,  Prof. 
Stuart,  The  Lord  Bishop  of  Durham,  The  Earl,  of  Derby, 
Lord  Reay,  Eight  Hon.  W.  Baxter,  M.P.,  Sedley  Taylor, 
Esq.,  and  Mr.  Lloyd  Jones. 

The  statistics  of  the  Union  are  presented  in  the  following 
table  :  * 

*  Co-operative  Annual,  1885. 


DISTRIBUTIVE  CO-OPEKATION. 


67 


YEARS. 

Subscrib- 
ing 
Societies. 

No.  of 
members. 

Subscriptions 
and 
Donations. 

Places  where  Congress 
met. 

Societies 
repre- 
sented. 

No.  of 
delegates. 

£       8.     d. 

1869 

55 

_ 

117    13      9 

London,  . 

57 

62 

1870 

_ 

Manchester, 

21 

96 

1871 

183 

86,139 

220    11    10 

Birmingham, 

30 

75 

1872 

202 

_ 

396      7      1 

Bolton,     . 

65 

130 

1873 

253 

_ 

922      8      8 

Newcastle-on-Tyne, 

92 

194 

1874 

357 

197,476 

1,375      6    11 

Halifax,  . 

94 

189 

1875 

352 

219,150 

1,495    10      5 

London,  . 

71 

114 

1876 

397 

219,748 

1,556      3      8 

Glasgow, 

03 

116 

1877 

430 

249,228 

1,764      2      8 

Leicester, 

109 

170 

1878 

450 

246,214 

1,939      0      3 

Manchester, 

164 

280 

1879 
1880 

469 
510 

270,665 
293,949 

1,980    13      7 
'2,190      5      3 

Gloucester, 
Newcastle-on-Tyne, 

85 
113 

130 
199 

1881 

494 

290,623 

2,120    10      9 

Leeds,      . 

154 

275 

1882 

496 

339,474 

2,115    13      4 

Oxford,    . 

141 

217 

1883 

553 

343,923 

2,660      9      2 

Edinburgh, 

246 

397 

1884 

606 

518,971 

3,043      9      2 

Derby,     . 

243 

425 

1885 

631 

554,156 

3,356      6      3 

Oldham,  . 

255 

578 

The  proceedings  of  the  Congresses  are  annually  published. 
The  Central  Board,  in  the  exercise  of  its  function  as  a  propa- 
gandist agency,  also  publishes  and  circulates,  either  by  gift  or 
sale,  many  pamphlets  and  documents  upon  co-operative  sub- 
jects. 

The  Central  Board  has  performed  much  work  of  a  purely 
utilitarian  nature,  relating  to  the  pecuniary  and  legal  interests 
of  the  societies.  Its  labors  of  this  kind  may  be  understood 
from  the  following: 

"The  appointment  of  the  present  General  Secretary*  has,  since 
1873,  secured  to  the  members  of  the  Union  legal  advice  free  of 
charge ;  the  publication  in  the  same  year  of  the  model  rules  for  land, 
building,  and  mortgages,  prepared  by  the  present  Chief  Registrar ; 
followed,  in  1874,  by  the  general  rules  for  industrial  and  provident 
societies,  which  have  since  been  twice  revised,  and  subsequently  by 
the  manuals  on  bookkeeping,  on  auditing,  and  on  the  system  of 
checks ;  the  various  Acts  relating  to  industrial  and  provident  socie- 
ties passed  before  1876  ;  the  consolidation  of  these  Acts,  with  many 
important  amendments,  in  1876  ;  the  extension  of  the  power  of  nom- 
ination, by  the  provident  nominations  and  small  intestacies  Act,  up 
to  the  limit  of  £100;  the  explanations  and  forms  relating  to  these 
nominations ;  the  indexes  and  other  documents  of  a  general  char- 
acter, prepared  and  issued  by  the  Central  Office  for  the  use  of  so- 
cieties; —  are  all  instances  of  this  action.  Not  less  important  has 
been  the  watchfulness  of  the  central  body  against  any  attacks  aimed 


*  Edward  V.  Neale,  Esq. 


68  A  MANUAL  OF 

at  co-operation  by  its  commercial  opponents  —  of  which  the  ener- 
getic action  taken  to  prevent  the  interference  with  the  liberty  of  the 
Civil  Servants  of  the  Crown  in  the  disposal  of  their  own  time, 
threatened  in  1881,  is  a  startling  instance."  * 

The  extension  of  co-operation  is  further  assisted  by  the  work 
of  the  Southern  Guild  of  Co-operators,  31  Southampton  Street, 
Strand,  London,  W.  C.,  which  exerts  itself  in  the  formation  of 
new  societies  and  in  the  education  of  the  public  in  co-operative 
principles  by  means  of  public  meetings. 

The  attentive  reader  of  this  report  must  perceive  that  so- 
called  co-operative  distribution,  upon  the  plan  formulated  by 
the  Rochdale  Pioneers,  and  as  at  present  followed  in  the  United 
Kingdom,  having  for  its  unit  the  retail  store ;  possessing  the 
advantage  of  strong  and  energetic  wholesale  societies,  composed 
of  and  supported  by  the  stores,  and  fostered  by  a  Central  Board 
and  Annual  Congresses,  has  been  in  the  highest  degree  success- 
ful in  what  it  has  undertaken. 

The  organization,  considered  as  a  whole,  is  admirable,  adapted 
to  hold  together  the  members,  and  to  advance  their  common  in- 
terests. Its  success  might  have  been  predicted,  for  the  whole 
movement  rests  upon  approved  and  well  recognized  business 
principles.  There  seems  to  be  no  reason  why  similar  enter- 
prises might  not  be  equally  successful  elsewhere  if  the  same 
plan  is  followed. 

Every  store  before  it  opens  has  its  support  assured  in  the 
trade  of  its  members,  If  honest  men  are  selected  as  officers  ; 
common  prudence  observed  in  the  conduct  of  business  ;  reason- 
able care  exercised  in  the  purchase  of  stock  in  trade,  and  the 
cash  system  strictly  adhered  to,  failure  should  be  impossible. 

The  business  may  expand  as  membership  increases,  and  ex- 
penses may  at  all  times  be  kept  well  in  hand. 

Of  course,  in  the  United  States,  the  isolated  store  must 
miss  the  valuable  help  which  the  English  stores  have  in  the 
organization  that  has  grown  up  as  the  movement  in  that 

*  This  relates  to  an  attempt  on  the  part  of  certain  private  traders  to  prevent  govern- 
ment employe's  assisting  in  the  management  of  co-operative  stores.  Aimed  ostensibly 
at  the  London  supply  associations,  it  would,  if  successful,  have  affected  the  operation 
of  certain  workingmen's  associations  elsewhere.  It  was  defeated  by  the  prompt  action 
of  the  Co-operative  Union. 


DISTRIBUTIVE  CO-OPERATI 

country  has  gained  strength;  but,  if  stores  were  to  multiply 
in  America  the  same  organization  would  follow  here,  and, 
meantime,  the  recorded  experience  of  English  effort,  if  availed 
of  among  us,  would  prevent  serious  errors  in  the  conduct  of 
business. 

It  becomes  proper  then  to  review  just  what  this  movement 
has  accomplished,  and  what,  if  anything,  it  has  failed  to  achieve  ; 
and  in  entering  upon  this  inquiry  we  desire  to  be  perfectly  fair, 
while  at  the  same  time  presenting  the  actual  facts.  For,  in  jus- 
tice to  those  who  in  this  country  are  interested  in  co-operative 
effort,  and  may  seek  to  establish  such  stores  here,  it  is  well 
clearly  to  point  out  its  limitations  as  well  as  its  possibilities, 
in  order  that  no  more  may  be  expected  than  is  likely  to  be 
realized. 

In  the  first  place,  how  far  is  this  movement  co-operative? 
The  answer  must  be  only  so  far  as  it  rests  upon  the  participa- 
tion of  all  customers  in  the  profits  they  produce  by  their  trade. 
This  is  the  sole  co-operative  feature.  We  speak  broadly,  and 
disregard  for  the  moment  the  limited  number  of  societies  which 
have  gone  one  step  farther  and  allowed  a  share  in  profits  to 
employes. 

The  division  of  profits  upon  the  basis  of  purchases,  and  the 
restricting  of  stockholders  to  a  fixed  rate  of  interest  on  their 
capital  stock,  entitle  these  stores  to  the  name  co-operative,  in 
distinction  from  the  Civil  Service  distributive  societies  and 
other  joint  stock  companies  in  which  profits  are  divided  upon 
the  basis  of  stock.  In  the  latter  only  stockholders  gain  from 
increase  of  trade.  In  co-operative  stores  all  customers  gain, 
and  the  store  is  open  to  all  who  come.  The  stockholder  re- 
ceives only  his  stipulated  interest,  that  being  the  remuneration 
to  which,  as  a  capitalist,  he  is  entitled.  All  who  assist  in  mak- 
ing the  profit  share  in  its  division.  The  principle  is  modified 
in  its  operation  but  not  disregarded  by  the  plan  of  allowing 
members  to  share  at  double  the  rate  of  non-members ;  for  no 
limitation  exists  as  to  membership,  and  non-members  may  by 
a  small  payment  become  members  at  any  time,  and  begin  at 
once  to  share  at  the  members'  rate. 

The  stores  are  justly  open  to  the  criticism  that  while  calling 
themselves  co-operative,  they  are,  except  in  the  feature  we  have 
mentioned,  not  really  so.  Perhaps,  considering  the  sense  in 


70  A  MANUAL  OF 

which  the  term  co-operation  is  used  in  economic  discussion, 
and  the  persistency  and  good  faith  with  which  it  is  urged  by 
many  as  a  remedy  for  industrial  evils,  the  name  "  Consumers' 
Societies  "  would  be  more  appropriate.  For  it  is  no  detraction 
from  the  solid  benefits  these  societies  have  reaped  to  admit 
that  as  yet  they  have  done  little  to  solve  the  vexed  questions 
affecting  labor  and  capital,  or  to  advance  co-operative  princi- 
ples as  they  are  generally  understood. 

This  mode  of  distribution  is  organized,  economized,  and 
made  effective  for  consumers  almost  entirely,  and  producers, 
as  such,  are  not  materially  benefited.  The  societies  as  purchas- 
ers keenly  appreciate  and  follow  the  rule  adopted  by  the  pri- 
vate trader,  buying  at  the  lowest  possible  competition  prices, 
and  in  their  transactions  with  producers  making  use  of  the  same 
expedients  as  those  employed  in  private  trade  to  drive  good 
bargains,  and  thus  swell  profits  for  the  benefit  of  their  cus- 
tomers. 

The  maxim  that  "  goods  well  bought  are  half  sold"  is  kept 
constantly  in  view,  and  the  importance  of  keen  and  shrewd 
buying  is  so  well  understood  that  employes  possessing  the 
requisite  ability  in  this  direction  are  highly  prized  and  liberally 
paid.  To  the  producer,  therefore,  this  system  of  distribution 
offers  no  special  advantages. 

How  does  it  affect  the  wage  worker  ?•  The  English  whole- 
sale conducts  with  co-operative  capital  a  considerable  manufact- 
uring business,  and  production  under  the  management  of  the 
societies  is  likely  to  increase.  Supposing  it  to  increase  under 
the  policy  already  pursued,  what  benefit  would  accrue  to  the 
employes  other  than  those  obtained  from  private  employers? 
None.  Exactly  the  same  principles  appear  to  govern  the  co- 
operative and  the  individual  employer.  The  Co-operative 
Wholesale  pays  competition  wages  and  manufactures  its  goods 
at  the  lowest  possible  labor  cost.  Its  workmen  have  no  share 
in  profits.*  Its  object  is  to  divide  the  largest  possible  profits 
among  its  customers.  Its  mode  of  operation  is  identical  with 
that  of  the  private  employer. 

This  has,  indeed,  provoked  criticism.     Says  one  observer : 

*  The  Scottish  Wholesale  escapes  this  criticism.  Its  employes,  as  previously  noted, 
Bhare  in  dividends. 


DISTRIBUTIVE  CO-OPERATION.  71 

"The  Co-operative  Wholesale  Society  is  a  gigantic  middleman; 
in  its  workshops  it  pays  the  lowest  of  competition  wages ;  in  the 
language  of  one  of  the  workers  in  one  of  the  shoe  factories,  '  the 
workmen  have  to  work  for  what  they  can  get,  they  know  there  is  no 
true  co-operation/  In  its  transactions  with  other  producers  it  pays 
the  lowest  of  competition  prices  ;  the  profits  made  out  of  the  retail 
prices  are  distributed  amongst  the  members,  labor  is  depressed.  In 
short,  it  is  as  far  from  displaying  a  single  feature  of  real  co-opera- 
tion as  any  private  trader  is  who  uses  the  weapons  of  competition 
and  capitalism  for  his  personal  ends,  regardless  of  the  interests  of 
others. 

"The  Co-operative  Labor  Association,  whose  principal  object  is  to 
recognize  the  combined  interests  of  capital  and  labor  in  productive 
enterprise,  is  largely  composed  of  members  of  the  co-operative  move- 
ment. In  a  conference  just  held,  a  resolution  was  passed  asking  '  the 
committee  of  the  Labor  Association  to  point  out  in  a  fraternal  spirit 
to  the  Wholesale  Co-operative  Society  the  grave  injury  they  are  doing 
to  the  cause  of  co-operation  by  their  failure  to  carry  out  co-operative 
principles  in  their  productive  works,  and  to  offer  their  services  in 
placing  the  wholesale  workshops  upon  a  true  co-operative  basis/  "* 

So  far  then  as  relates  to  removing  the  evils  which  it  is  alleged 
spring  from  competition,  these  societies  have  not  yet  conspicu- 
ously succeeded.  This  does  not  indicate  failure,  for  it  does  not 
appear  that  in  practice  much  has  been  attempted  in  this  direc- 
tion. Probably  any  other  course  than  that  puisued  would 
have  diminished  the  profits  which  have  been  divided  among  the 
members.  It  is  shrewd  business  management  that  has  helped 
to  amass  these  profits,  and  if  the  societies  be  judged  solely  by 
their  success  in  what  they  have  attempted  no  fault  can  be 
found. 

It  is  only  when  this  success  is  used  to  attest  the  efficacy  of 
co-operative  theories,  that  the  impartial  critic  must  dissent. 
As  a  rule,  the  co-operative  societies  have  contented  themselves 
with  financial  success,  leaving  to  the  future  the  extension  and 
application  of  the  theories,  which,  up  to  this  time,  although 
seeming  to  disregard  in  practice,  they  have  never  ceased  to  dis- 
cuss and  advocate. 

Whatever  hope  and  future  promise  may  rest  in  co-operation 


*  "Distribution  Reform,"  by  Thos.  Illingworth,  pages  90-91.    Cassell  &  Co.,  Pub- 
lishers. 


72  A  MANUAL  OF 

it  is  not  as  a  scheme  for  removing  all  the  evils  which  many  feel 
to  be  inherent  in  the  present  industrial  organization  that  this 
plan  of  co-operative  distribution  is  to  be  recommended.  It 
may  be  a  help,  however.  As  a  method  of  capital-saving  it 
affords  the  groundwork  of  a  system  of  co-operative  produc- 
tion, which  might  be  made  safe  and  remunerative  so  far  as  the 
market  for  product  could  be  assured  by  the  demands  of  the 
stores  themselves.  Such  an  assured  market  would  materially 
relieve  the  co-operative  producers  from  the  struggle  which  must 
always  be  before  them  in  any  effort  to  secure  a  market  in  com- 
petition with  private  manufacturers.  Taken  for  what  it  is,  it 
has  been  of  great  benefit  to  the  working  classes  in  Great 
Britain,  and  under  similar  social  conditions  might  be  equally 
beneficial  elsewhere. 

It  has  brought  to  680,165  members,  £24,084,113  in  profits, 
and,  incidentally,  it  has  produced  other  results  which  no  statis- 
tics can  adequately  portray,  results  moral  rather  than  material. 
It  has  stimulated  thrift,  taught  self-reliance,  encouraged  the 
ownership  of  property,  prevented  debt  by  making  cash  pay- 
ments obligatory,  and  placed  in  the  hands  of  its  patrons  goods 
practically  free  from  adulteration.  In  the  English  manufactur- 
ing towns  it  has  promoted  the  social  spirit  by  bringing  members 
together  in  reunions  and  in  educational  work.  And  despite  all 
criticism  which  may  be  made  upon  the  slowness  of  these  socie- 
ties to  advance  farther  upon  the  co-operative  line,  it  must  be 
conceded  that  there  is  much  truth  in  the  following  from  the  pen 
of  the  able  Secretary  of  the  Central  Board : 

"The  supporters  of  such  a  store  have,  as  they  ought  to  have, 
ample  reasons  for  supporting  it  in  their  own  interest.  Ancl^those 
who  join  these  institutions  when  they  are  successful  too  often  have 
no  other  motive  than  the  notion  of  personal  advantage.  Still  the 
feeling  that  the  store  is  an  institution  essentially  unselfish,  excluding 
no  one  from  its  benefits,  founded  for  the  common  good  of  all  who 
can  be  induced  to  take  part  in  it  *  —  this  feeling,  derived  from  the 
noble  spirit  of  the  original  founders  of  these  stores,  has  given  a 
characteristic  tone  both  to  their  own  action  and  to  the  public  appre- 
ciation of  them.  Their  educational  funds,  their  social  parties,  the 
attendance  at  public  meetings  connected  with  them,  the  absence  of 

*  In  contradistinction  to  the  joint  stock-  companies,  where  the  stock  is  limited. 


DISTRIBUTIVE  CO-OPERATION.  73 

a  disposition  to  ridicule  their  rejoicings  at  the  founding  of  a  new 
store,  are  proofs  of  this.  There  is  a  general  perception  that  the 
co-operative  society  has  in  view  an  end  beyond  the  private  interest 
of  those  who  set  it  up,  which  gives  to  these  trading  establishments 
a  sort  of  consecration,  even  in  the  eyes  of  those  who  do  not  belong 
to  them."* 

Much  of  what  has  been  done  abroad  through  these  societies 
is  done  in  Massachusetts  by  the  savings  bank,  the  evening 
school,  the  public  library,  free  lectures,  and  other  institu- 
tions common  here,  and  growing  out  of  our  conception  of  a 
free  State  and  republican  institutions.  Much  of  the  need  for 
these  stores  is  also  met  in  our  larger  towns  by  enterprising 
private  concerns  who  put  before  the  public  the  best  goods  at 
low  cash  prices.  But  still  there  is  no  doubt  that  in  many  towns 
the  same  financial  benefits  might  accrue  to  any  society  formed 
and  conducted  on  the  Rochdale  plan,  the  work  being  modified 
in  some  respects  to  meet  local  requirements,  and  to  conform  to 
the  needs  of  American  communities.!  The  experiment  is  one 
easily  tried,  not  involving  loss  if  carefully  managed,  and  the 
results,  if  successful,  well  worth  the  effort. 

NOTE.  It  may  be  noticed  that  the  statistics  showing  the  condition  of  the  English 
wholesale  society,  December,  1883,  contained  in  the  table  on  pages  60  and  61,  differ 
somewhat  from  those  contained  in  the  table  upon  page  44.  The  excess  of  the  totals  in 
the  table  on  page  44  over  those  in  the  table  on  pages  60  and  61  is  to  be  explained  from 
the  fact  that  the  table  upon  page  44  relates  to  relations  existing  between  the  wholesale 
and  all  purchasing  co-operative  societies,  many  of  which  are  not  shareholders,  while  the 
table  upon  pages  60  and  61  relates  to  the  accounts  between  the  wholesale  and  its  share- 
holding societies.  Differences  in  the  classification  of  certain  loans  and  deposits  create 
differences  in  the  capital  account  totals,  and  the  excess  of  sales  shown  in  the  table,  pages 
60  and  61,  over  the  amount  returned  as  purchased  from  the  wholesale  by  co-operative 
societies  in  the  table,  page  44,  is  caused  by  the  fact  that  the  larger  amount  includes  sales 
to  other  than  co-operative  societies  of  goods  which  in  the  course  of  trade  the  wholesale 
is  obliged  to  buy,  but  cannot  dispose  of  to  its  own  customers,  and  is  therefore  obliged  to 
sell  in  the  open  market. 

*  Co-operative  Board  Pamphlets. 

t  See  in  this  connection  the  account  of  the  Arlington  Co-operative  Association,  at 
Lawrence,  Mass.,  contained  in  the  Appendix. 


APPENDIX. 


The  following  pages  present  a  condensed  account  of  the  posi- 
tion of  productive  co-operation  in  Great  Britain,  and  of  pro- 
ductive and  distributive  co-operation  upon  the  European 
continent  and  in  Australia. 

For  the  material  from  which  the  account  of  continental  and 
Australian  co-operation  was  prepared,  the  Bureau  is  mainly 
indebted  to  the  report  of  a  committee  upon  that  subject  to  the 
Seventeenth  Annual  Co-operative  Congress,  held  at  Oldham, 
England,  in  May,  1885,  the  authorities  upon  which  said  report 
was  based  being  noted  in  connection  with  each  country  respect- 
ively. The  matter  is  of  interest  in  considering  the  general 
subject  of  co-operation,  and  is  of  sufficient  importance  to  war- 
rant its  presentation  here. 

As  the  record  of  a  successful  American  experiment  in  dis- 
tributive co-operation,  upon  a  plan  similar  to  that  instituted  at 
Rochdale,  may  be  of  value  to  others  proposing  to  enter  the 
field,  we  have  also  included  an  account  of  the  Arlington  Co- 
operative Association,  at  Lawrence,  Massachusetts. 

That  form  of  co-operation  known  as  "profit  sharing"  is 
treated  in  detail  in  Part  II.  of  the  Seventeenth  Annual  Report 
of  this  Bureau  (in  Part  I.  of  which  Report  this  chapter  on  dis- 
tributive co-operation  is  included) ,  and  is  therefore  not  consid- 
ered here. 

CO-OPERATIVE  PRODUCTION  IN  GREAT  BRITAIN. 

The  second  step  in  co-operation,  according  to  the  leaders  of 
the  movement,  is  its  application  to  production.  The  theorists, 
who  have  devoted  their  lives  to  the  advancement  of  co-opera- 
tive principles,  will  never  rest  satisfied  with  its  application 

[75j 


76  A  MANUAL  OF 

merely  to  the  business  of  buying  and  selling  commodities,  how- 
ever admirable  the  results  may  appear.  To  them  the  whole 
structure  of  co-operative  distribution  is  but  the  foundation  of  a 
far  nobler  edifice.  To  utilize  in  production  the  capital  saved 
in  co-operative  stores  so  as  gradually  to  remove  competition  in 
industry  is  the  end  they  hope  finally  to  reach.  Meantime  their 
efforts  are  devoted  to  arouse  the  workingmen  who  are  attached 
to  the  distributive  societies  to  a  deeper  sense  of  the  benefits  of 
a  co-operative  system  which  would  include  production  as  well 
as  distribution,  and  to  overcome  the  indifference  to  other  mo- 
tives than  those  of  immediate  personal  and  pecuniary  gain. 

It  is  unfortunate  that  there  seems  to  be  no  well-matured  plan 
commending  itself  to  general  acceptance  upon  which  co-opera- 
tive production  can  go  forward.  Two  distinct  schools  exist :  the 
individualists  and  the  federalists.  The  first  hold  that  individual 
bodies  of  workingmen  should  start  for  themselves  in  productive 
enterprises,  obtaining  their  capital  either  from  their  own  sav- 
ings or  by  loan.  The  business  should  then  be  conducted  inde- 
pendently of  the  distributive  societies,  and  managed  by  the 
workingmen  immediately  interested,  who  may,  if  necessary,  go 
into  the  open  market  and  secure  trade  by  superior  energy  or  on 
account  of  the  high  quality  of  their  product.  The  federalists, 
on  the  other  hand,  believe  that  the  federated  stores  should  pro- 
vide the  basis  for  productive  effort;  the  capital  saved  in  the 
stores  should  be  used ;  the  demand  of  the  stores  should  supply 
the  necessary  market,  and  the  management  should  be  by  com- 
mittee, precisely  as  the  wholesale  societies  are  managed. 
Either  individual  societies  might  begin  by  manufacturing  goods 
to  supply  their  local  needs,  or,  as  would  seem  more  feasible, 
the  wholesale  societies,  possessing  a  wider  market,  and  able  by 
their  experience  accurately  to  gauge  production  to  demand, 
might  proceed  upon  the  plan  already  adopted  in  the  Leicester 
Shoe  Works. 

The  individualist  would  permit  individual  shareholders  ;  the 
federalist  would  not,  believing  such  permission  dangerous  as 
tending  to  joint-stockism.  Strict  adherence  to  the  federalist 
system,  as  usually  presented,  would  exclude  the  worker  from 
participation  in  profits,  except  in  his  function  as  consumer  as  a 
member  of  some  store  having  capital  invested  in  the  works, 
and  except  as  a  bonus  or  gratuity  might  be  given  him  for 


DISTRIBUTIVE  CO-OPERATION.  77 

superior  work  or  extraordinary  skill.  In  the  works  at  present 
conducted  by  the  English  wholesale  society  upon  substantially 
this  plan,  the  workers,  as  workers,  do  not  share  in  profits  at 
all. 

The  difficulties  attending  both  systems,  as  well  as  their  ad- 
vantages, are  apparent.  If  the  workers  provide  their  own 
capital  and  divide  the  profits  among  themselves,  not  alone  in 
proportion  to  capital  but  also  in  proportion  to  work  done,  the 
concern  would  be  strictly  co-operative,  but  its  success  would 
largely  depend  upon  the  p_aelity  and  talent  of  the  managers, 
requisite  qualities  not  easily  procured,  and  upon  the  possibility 
of  securing  a  permanent  and  remunerative  market.  To  obtain 
the  latter  would  involve  keen  competition  with  private  concerns 
already  well  established,  or,  if  several  co-operative  societies 
were  seeking  a  market  for  the  same  product,  keen  competition 
with  each  other.  There  is  also  the  difficulty,  by  no  means 
small,  of  securing  the  required  capital.  The  risk  is  very  great, 
and  workingmen  are  poorly  equipped  to  encounter  it. 

If,  to  overcome  the  difficulty  as  to  capital,  outside  stock- 
holders are  admitted,  the  enterprise  loses  its  strictly  co-opera- 
tive character,  jealousy  is  likely  to  arise  between  workers  and 
shareholders  (capitalists) ,  and  the  latter  may  at  any  time  secure 
control  and  the  concern  become  a  purely  joint  stock  company. 

If,  on  the  other  system,  the  federated  societies  provide,  as 
they  may,  both  capital  and  market,  the  two  great  difficulties  in 
the  way  of  co-operative  production  may  be  overcome ;  over- 
production may  be  guarded  against ;  more  or  less  capital  may 
be  utilized  as  occasion  demands,  and,  practically,  loss  may  be 
prevented. 

But  if  profits  are  to  be  divided  among  consumers  only,  that 
is,  if  profits  are  to  go  to  the  stores  which  furnish  the  capital, 
and  are  then  disseminated  in  the  form  of  dividends  on  pur- 
chases to  the  patrons  of  the  stores,  the  workers,  as  such, 
acquire  no  benefit  not  obtainable  in  private  employment.  The 
scheme  is,  after  all,  so  far  as  the  workers  are  concerned,  not 
co-operative. 

Some  federalists  advocate  a  bonus  or  share  in  profits  to  labor. 
In  both  schools  many  shades  of  individual  opinion  appear. 
Mr.  Holyoake,  for  instance,  ably  advocates  the  participation  of 
labor,  capital,  and  custom  (consumers)  in  profits ;  remunerat- 


78  A  MANUAL  OF 

ing  capital  by  a  fixed  rate  of  interest,  and  dividing  the  remain- 
der between  laborers  and  consumers,  always  providing  that  labor 
shall  have  an  adequate  self-protecting  representation  upon  the 
directory.  Such  a  plan,  he  believes,  can  only  be  adjusted  and 
maintained  by  the  system  of  federation,  while,  at  the  same 
time,  he  is  for  individualism,  in  the  sense  of  securing  the  local 
capacity,  the  personal  interest,  and  energy  of  the  three  parties, 
laborer,  capitalist,  and  consumer,  who,  it  appears  to  him,  make 
up  the  force  of  co-operation. 

Radically  opposed  to  the  theory  of  the  consumer's  right  to 
share  in  the  profits  of  production,  Mr.  J.  M.  Ludlow,  the 
Registrar  of  Industrial  and  Friendly  societies,  an  individualist, 
would  have  production  carried  on  by  independent  unions  of 
workers,  for  whom,  primarily,  the  profits  should  be  reserved. 

Dr.  John  Watts,  however,  an  eminent  federalist,  rejects  any 
plan  of  individual  action,  as  tending  to  relapse  into  competition, 
and  would  divide  the  profits  arising  in  federated  production 
among  the  societies  furnishing  the  capital  in  proportion  to  the 
capital  furnished  by  each,  and  afterward  to  their  members  as 
dividends  on  purchases.  This  scheme,  as  pointed  out  by 
Messrs.  Hughes  and  Neale,  must  undoubtedly  cause  the  largest 
share  of  profits  to  go  to  the  richer  classes,  they  being  the 
largest  buyers ;  is  essentially  a  division  of  profits  on  capital 
(joint-stockism)  ;  and  entirely  overlooks  the  worker,  as  such. 
"  The  notion  of  so  carrying  on  work  that  the  worker  may  get 
the  full  benefit  of  his  labor,  after  providing  for  the  cost  of  capi- 
tal, is  replaced  by  that  of  so  carrying  it  on  that  the  consumers, 
whether  producers  or  not,  should  get  the  greatest  possible 
benefit  out  of  it."  * 

Mr.  Neale,  while  adhering  to  the  federative  scheme,  as 
diminishing  the  risk  that  must  inevitably  accompany  individual 
action,  believes  that  in  any  system  of  co-operative  production 
the  worker  should  acquire  the  profits,  after  the  remuneration  of 
capital  by  payment  of  interest,  and  that  the  consumer  ou°:ht 
not  to  share  in  the  profits  of  production.  He  believes  further, 

u  That  it  is  quite  practicable  to  carry  on  production  in  close  con- 
nection with  a  distributive  centre,  under  conditions  which  will  prevent 

*  Manual  for  Co-operators  (published  by  the  Central  Co-operative  Board),  page  133. 


DISTRIBUTIVE  CO-OPERATION.  79 

any  competitive  conflict  among  the  producers,  without  withdrawing 
from  the  workers  any  of  the  advantages  derivable  from  their  work."  * 

He  has  also  clearly  shown,  enforcing  his  argument  by  the  sig- 
nificant statistics  of  the  extensive  Leicester  Shoe  Works,  and 
of  the  spinning  companies  at  Oldham,  that 

"  Large  as  the  total  proceeds  of  any  work  may  be  —  vast  as  may 
be  the  establishments  where  the  production  is  carried  on  —  imposing 
as  the  result  may  appear  when  the  net  profits  of  such  great  works 
are  concentrated  in  the  hands  of  a  few  persons  —  these  profits  when 
divided  among  the  host  of  workers  engaged  in  producing  them  will 
make  but  a  small  addition  to  the  sum  that  those  workers  would  earn. 
Naturally,  if  they  are  to  be  further  diluted  by  division  among  the 
large  body  of  persons  who  may  have  made  purchases,  the  benefit 
must  be  proportionately  diminished.''! 

And  he  goes  on  to  suggest  that  the  collective  income,  instead 
of  being  frittered  away  in  minute  dividends  to  each  worker, 
might  by  agreement  be  employed  in  associated  action  to  create 
better  conditions  of  life,  such,  for  example,  as  private  em- 
ployers, like  Sir  Titus  Salt,  have  attempted  to  confer  upon  their 
workpeople,  or  such  as  have  been  secured  through  the  associ- 
ated homes  projected  by  M.  Godin,  at  Guise. 

While  these  various  theories  prevail,  little  has  actually  been 
done.  Disregarding  all  such  concerns  as  the  spinning  com- 
panies at  Oldham,  which,  though  frequently  termed  co-opera- 
tive, are  absolutely  joint  stock  companies  dividing  profits  on 
stock,  held  at  present  by  workers  chiefly,  but  liable  at  any 
time  to  change  ownership,  and,  in  any  event,  no  different  in 
principle  or  administration  from  the  ordinary  joint  stock  cor- 
poration,—  there  are  a  few  productive  societies  in  Great 
Britain  that  permit  workers,  as  workers,  to  share  in  profits 
and  are  managed  by  the  workers  themselves.  Many  of  these 
have  share  capital  also,  to  which  part  of  the  profits  go,  and 
some  admit  customers  to  participation  in  the  dividend.  The 
following  table  exhibits  these  societies  at  the  beginning  of 
1884 : 

*  Manual  for  Co-operators,  page  139. 

t  Seventeenth  Annual  Co-operative  Congress ;  preface  to  Report,  page  IV. 


80 


A  MANUAL  OF 


Co-operative  Productive  Societies. 


NAME. 

Date 
estab- 
lished. 

BUSINESS. 

Yearly 
Sales. 

Yearly 
Profits. 

METHOD  OP  DIVIDING 

PROFITS. 

£ 

£ 

Arnold  Manufacturing, 

1868 

Hosiers. 

200 

Between    shareholders 

and  workers. 

Airedale    Manufactur- 

1872 

Alpacas,      cords, 

5,799 

427 

Between  shareholders, 

ing. 

etc. 

customers,  and  work- 

ers. 

Cobden  Mills, 

1867 

Calicoes. 

52,264 

_ 

Between    shareholders 

and  workers. 

Coventry     Watchmak- 

1876 

Watches. 

2,623 

278 

Between  shareholders, 

ers, 

customers,  and  work- 

ers. 

Co-operative  Printers,  . 

1869 

Printers    and     sta- 

33,589 

2,789 

Between  shareholders, 

tioners. 

customers,  and  work- 

ers. 

Dudley  Nailmakers,     . 

1874 

Nailmakers. 

1,212 

83 

Between    shareholders 

and  workers. 

Dunfermline  Manufact- 

1872 

Damask  table  linen. 

1,672 

67 

No  details. 

uring, 

Eccles  Manufacturing, 

1861 

Quilts    and     toilet 

9,767 

1,058 

Between    shareholders 

covers. 

and  workers. 

Edinburgh  Printers,     . 

1873 

Printers    and    sta- 

3,027 

236 

No  details. 

tioners. 

Framemakers  and 

1858 

Carvers,   gilders, 

6,389 

_ 

Between    shareholders 

Gilders,  London, 

and  general  deco- 

and workers. 

rators. 

Hebden  Bridge  Manu- 

1870 

Fustian    cutters, 

22,103 

1,980 

Between  shareholders, 

facturing, 

etc. 

customers,  and  work- 

ers. 

Howley  Park  Quarry,  . 

1872 

Stoneworkers. 

3,624 

500 

No  details. 

Lancashire  and  York- 

1873 

Flannels. 

16,396 

43 

Between    shareholders 

shire  Productive, 

and  customers. 

Leek  Silk  Twist  Manu- 

1874 

Silk  thread. 

2,688 

2 

No  details. 

facturing, 

Leicester    Manufactur- 

1876 

Hosiers. 

6,273 

133 

Between  shareholders, 

ing, 

customers,  and  work- 

ers. 

Leicester  Elastic  Web, 

1878 

Web  weavers. 

4,493 

129 

No  details. 

Sheepshed     Manufact- 

1881 

Hosiers. 

92 

_ 

Between    shareholders 

uring, 

and  workers. 

Sheffield  Cutlery  Manu- 

1873 

Knives    and    scis- 

439 

69 

No  details. 

facturing, 

sors. 

Sheffield  Haft  and  Scale 

1876 

Haft  makers. 

3,906 

125 

No  details. 

Cutting, 

Paisley  Manufacturing, 

1861 

Plaids,  shawls,  etc. 

11,891 

568 

Between  shareholders, 

customers,  and  work- 

ers. 

Northamptonshire  Pro- 

1881 

Bootmakers. 

1,662 

128 

Between    shareholders 

ductive, 

and  workers. 

Walsall  Manufacturing, 

1874 

Lockmakers. 

3,986 

" 

No  details. 

The  above  table  is  extracted  from  "  Workingmen  Co-opera- 
tors," page  103.  The  same  work  is  also  our  authority  for  the 
statement,  attributed  to  a  leading  co-operator,  that  224  co- 
operative productive  societies  registered  under  the  Industrial 
and  Provident  Societies  Act  have  been  dissolved.  Of  these, 
156  were  small  joint  stock  companies  with  no  co-operative 
element  in  them ;  44  divided  profits  between  capitalists  and 
customers ;  and  24  between  capitalists,  customers,  and 
workers. 


DISTRIBUTIVE  CO-OPERATION.  81 

The  Registrar's  returns  for  the  year  ending  December  3, 1883, 
exhibit  34  so-called  productive  societies  in  England  and  Wales, 
and  4  in  Scotland.  But  of  these,  14  were  corn  (flour)  mills, 
in  which  it  is  not  usual  to  admit  workers  to  share  in  profits, 
and  two  were  agricultural. 

This  brief  record  appears  to  be  all  that  co-operative  produc- 
tion has  at  present  to  exhibit  in  Great  Britain. 


CO-OPERATION  IN  FRANCE.* 

The  social  hopes  fostered  in  France  by  the  political  revolu- 
tion of  1848  were  partly  realized  in  the  formation  of  large 
numbers  of  co-operative  societies.  The  enthusiasm  of  the 
moment  and  the  influence  of  government  patronage  stimulated 
the  movement,  but  few  possessed  sufficient  vitality  to  long  sur- 
vive. The  re-establishment  of  the  empire  in  1852  was  an 
event  at  first  decidedly  unfavorable  to  their  progress,  but  in 
1864  co-operation  at  Paris  once  more  revived,  and  later  was 
assisted  by  favorable  legislation.  In  1870,  20  workingmen's 
co-operative  societies  engaged  in  production  existed  at  Paris 
and  at  present  there  are  more  than  70  such  societies.  Outside 
of  Paris  few  such  societies  exist. 

The  following  details  are  tabulated  from  statistics  published 
by  the  Bureau  des  Associations  Professionelles  : 

*  Authorities  :  M.  Nicole,  of  the  Consolidated  Chamber  of  the  Workingmen's  Pro- 
ductive Association  of  the  Department  of  the  Seine.  Evidence  before  a  Parliamentary 
Commission.  Report  of  the  Bureau  des  Associations  Professionelles. 


A  MANUAL  OF 


The  Co-operative 


NAME   OF  THE  ASSOCIATION. 


French. 


English. 


Appareils  a  gaz  (Ouvriers  fabricants  d'), 


Argonnieurs  ferreurs, 
Bailment  (Societe  generale  du),  . 
4  Bijoutiers  en  dore  (Association  des), . 
£  Bijoutiers  en  double  (Association  des) , 
6  Bijoutiers-joailliers  (Association  des) , 
Chapeliers  (Association  generale  ouyriers), 
Charrons  (Association  collective  des), 
Charpentiers  de  la  Seine  v Association  des) , 


Dharpentiers  de  la  Villette  (Association  des) ,   . 
Cimentiers  (Association  generale  dee  ouvriers), 
Cimentiers  (Societe  des  ouvriers  reunis),   . 
Cochers  (La  nouvelle  association  des), 
tellers  (L'Eeperance,  Association  des),  . 


14 

15  Cochers  (Association  des), 


Cochers  (L'unipn  des), 
Cochers  (L'Alliance,  Association  dec), 
Dochers  (La  Parisienne,  Association  des), 
tochers  (La  Moderne,  Association  des), 


41 

42 

43 

44  Menuisiers  et  bailments, 

45 


Lunetiers 
Magons  et  ta 


(Societe  des), 
tailleurs  de  Pi 


erre  (L'union  des  ouvriers) , 


Menuisiers  d'art  et  batiments, 
46  Menuisiers  en  sieges, 


Menuisiers  en  voitures, 


48  Moniteur  des  Syndicate  ouvriers, 

49  Opticiens  (Association  general  des  ouvriers), 

50  Orfevrerie  £  Association  ouvriere  d'),  . 


Papetiers  regleurs  (Association  des) 
Parqueteurs  (Societe  co-operative  des), 
Parqueteurs  (Association  d'ouvriers), 


54  Parqueteurs  (Association  Parisienne  des) , 


55 


Passementiers  (Association  des  ouvriers) , 


56  Paveurs  (Association  generale  d'ouvriers), 

57 jPaveurs  (Association  de),     . 

58  Peintres  en  batiment  (Travail  des),     . 

59'Peintres  en  bailment  (L'union  des),    . 

eOJPeintres  de  Paris  (La  Securite  de),     . 

61  (Restaurateurs  (Societe  co-operative  des),  . 

62; Sacs  de  dames  et  de  voyage, 

63  Sculpteursde  Paris  (L'union  des),      . 

64 1 Sculpture  (Association  co-operative  de  la), 

65  Sellerie  Parisienne  (Association  de  la), 

66'Serrurieurs  en  meubles 

67  Tailleurs  (Association  generale  des) , . 

68  Tailleura  de  limes 


Working  gas  apparatus  makers, 
Saddle  bow  binders,  . 
Builders, 


|  Different  kinds  of  jewellers, 

Working  hat  makers, 
Wheelwrights,    . 


20  Cochers  (La  Montrougienne,  Association  des),  . 

21  Cochers  (Le  Progres,  Association  des), 
Couvreurs,  plombiers,  zingueurs,        .... 

23 Ebenistes  (L'Avenir,  Association  des), 

24  Ebenisterie  Parieienue  (L'), 

25  Ebenisterie  (Association  de  1'), 

26  Ebenistes  (Societe  geuerale  f  rangaise  d'ameublement), 

27  Ebenisterie  (Association  syndic,  des), 

28  Facteurs  d'anches, 

29  Facteurs  de  pianos  (Association  des) , 

30  Facteurs  de  pianos  (L'Union,  Association  des), 

31  Facteure  d'instruments  de  musique,    .... 

32  Ferblantiers,  lanternes,  compteurs,      ,        .        .        . 

33  Ferblantiers-boitiers  (Association  des), 

34  Formiets  (Association  des), 

35  Horologers  f  Societe  anonyme  des) , 

36  Imprimerie  nouvelle  (Association  de  1') ,    . 

37  Jardiniers  (Association  co-operative  des),  . 
Joailliera  bijouticrs  a  fagon, 

39  Journal  Officicl  (Association  co-operation  du), . 

40  Limes  (Association  des  ouvriers  en),  . 
Lithographes  de  Paris  (Association  des),   . 


Working  carpenters,  . 
Working  cement  makers,  . 


Coachmen  or  cab  drivers,  . 


Slaters,  plumbers,  and  zinc  workers, 


Cabinet  makers, . 


Reedmakers, 


>  Pianoforte  makers,     .... 

Musical  instrument  makers, 
/  Tinworkers,  lantern,  and  meter  ma- 
i      kers 

Tin  box  makers,         .... 

Model  makers, 

Watchmakers, 

Printers,      .        .        . 

Gardeners,  .        ... 

Jewellers,    . 

Newspaper  publishers, 

Working  file  makers, 

Parisian  lithographers, 

Spectacle  makers, 

Working  masons  and  stone  cutters, 

Different  kinds  of  joiners, 

Trades  Union  newspaper, 
Working  opticians,     .... 
Working  goldsmiths, 
Ruled-paper  makers 

Inlaid  floor  makers,    .... 

Working  lace  makers, 
|  Working  pavers,        .... 

>  House  painters, 

Co-operative  restaurant,     . 
Makers  of  ladies'  and  traveller's  bags, 

|  Sculptors, 

Saddlers, 

Furniture  locksmiths, 

Tailors, 

File  cutters, 


DISTRIBUTIVE  CO-OPERATION. 


83 


Societies  of  Paris. 


Date  of 
Formation. 

CAPITAL. 

Number 
of  Asso- 
ciates. 

WHETHEB  AUXILIARIES 
SHARE  IN  PROFITS. 

Value  of  Work 
Done. 

Subscribed. 

Paid  up. 

No. 

Yes. 

£     *. 

£      s. 

£          8. 

„ 

15 

_ 

_ 

July       1,  1881 

180      0 

140      0 

7 

No 

_ 

3,400      0 

Jan.      24,  1882 

20,000      0 

5,000      0 

191 

No 

_ 

8,000      0 

Dec.      26,  1882 

816      0 

700      0 

12 

_ 

Yes 

4,480      0 

January,     1882 

1,000      0 

1,000      0 

160 

No 

- 

1,440      0 

July     27,  1882 

1,800      0 

840      0 

26 

No 

_ 

_ 

Dec.      12,  1883 

400      0 

280      0 

88 

_ 

Yes 

640      0 

Oct.      26,  1883 

400      0 

162    17 

23 

No 

_ 

1,626    16 

Feb.      18,  1881 

606      0 

491    16 

40 

No 

_ 

24,000      0 

Nov.     21,  1881 

3,200      0 

3,200      0 

183 

No 

_ 

40,000      0 

Aug.     22,  1881 

240      0 

282      0 

17 

No 

_ 

16,280      0 

Sept.     25,  1884 

320      0 

320      0 

11 

No 

- 

1,200      0 

Mar.      21,  1883 

1,760      0 

1,080      0 

73 

No 

_ 

16,000      0 

Feb.       9,  1884 

3,280      0 

2,765    19 

41 

_ 

Yes 

16,457      8 

Dec.       9,  1&74 

24,000      0 

18,504    10 

102 

No 

_ 

120,000      0 

Dec.       1,  1873 

14,200      0 

14,200      0 

129 

_ 

Yes 

_ 

Feb.      12,  1882 

6,080      0 

10,000      0 

105 

No 

_ 

_ 

Oct.        1,  1879 

6,880      0 

5,600      0 

43 

No 

_ 

_ 

Oct.        1,  1881 

8,640      0 

7,800      0 

54 

No 

_ 

_ 

Nov.     30,  1881 

9,600      0 

7,726      0 

60 

_ 

Yes 

Mar.     21,  1883 

1,760      0 

880      0 

73 

No 

_ 

Aug.     27,  1883 

800      0 

720      0 

27 

_ 

Yes 

6,000      0 

Aug.     24,  1879 

1,020      0 

740      0 

48 

No 

_ 

20,000      0 

Nov.     30,  1881 

2,800      0 

1,400      0 

130 

_ 

_ 

2,800      0 

June     30,  1884 

760      0 

240      0 

19 

_ 

Yes 

April    14,  1884 

320      0 

180      0 

10 

_ 

Yes 

4,400      0 

July      24,  1884 

320      0 

320      0 

125 

_ 

7,000      0 

Dec.       1,  1865 

700      0 

80      0 

7 

No 

_ 

40,000      0 

1849 

10,448      6 

10,448      0 

18 

No 

_ 

240,000      0 

April    15,  1882 

540      0 

625    11 

6 

_ 

_ 

6,400      0 

1865 

7,760      0 

6,520      0 

17 

No 

- 

92,000      0 

July,           1868 

8,480      0 

6,000      0 

106 

No 

- 

140,000      0 

March,        1875 

3,680      0 

2,800      0 

39 

_ 

_ 

160,000      0 

Nov.     17,  1849 

2,320      0 

1,545    14 

12 

No 

_ 

102,000      0 

Aug.       8,  1882 

640      0 

393    12 

20 

No 

_ 

3,240      0 

Nov.      12,  1869 

8,000      0 

8,000      0 

1,348 

No 

•  _ 

160,000      0 

Mar.      16,  1881 

600      0 

312      0 

30 

- 

Yes 

548      0 

Feb.        5,  1881 

224      0 

224      0 

28 

_ 

Yes 

88,000      0 

Sept.     27,  1848 

8,400      0 

6,890    17 

21 

No 

194,640      0 

March,        1866 

20,000      0 

20,000      0 

250 

_ 

_ 

120,360      0 

Aug.       6,  1849 

89,600      0 

53,262    10 

112 

No 

_ 

1,200,000      0 

March,        1885 

400      0 

900      0 

15 

_ 

Yes 

Feb.      21,  1884 

420      0 

245      7 

7 

_ 

Yes 

1,235    10 

Mar.     27,  1884 

240      0 

240      0 

12 

_ 

Yes 

2,640      0 

Nov.     16,  1848 

64      0 

64      0 

16 

No 

_ 

306,911      4 

« 

_ 

— 

_ 

_ 

_ 

Nov.       4,  1882 

1,000      0 

600      0 

39 

_ 

_ 

1,240      0 

Dec.      25,  1864 

4,800      0 

2,860      0 

5 

No 

_ 

64,000      0 

Sept.     21,  1881 

2,000      0 

1,060      0 

116 

No 

_ 

600      0 

May        1,  1883 

2,400      0 

365      4 

6 

No 

_ 

1,600      0 

Oct.      22,  1881 

200      0 

192      4 

12 

No 

_ 

13,374      6 

Dec.       3,  1883T 

120      0 

67      9 

6 

Yes 

4,000      0 

Aug.       7,  1884 

120      0 

24      0 

9 

_ 

7,000      0 

Dec.      16,  1884 

600      0 

84      0 

_ 

_ 

_ 

200      0 

Feb.      11,  1883 

6,440      0 

660      0 

- 

No 

_ 

15,200      0 

Feb.      17,  1883 

1,440      0 

1,460      0 

_ 

No 

_ 

20,000      0 

Dec.     27,  1882 

800      0 

536      0 

_ 

_ 

Yes 

11,200      0 

May        7,  1883 

816      0 

579    16 

13 

_ 

Yes 

6,520      0 

Feb.      10,  1885 

280      0 

28      0 

7 

_ 

Yes 

— 

_ 

_ 

_ 

_ 

_ 

- 

980      0 

440      0 

10 

- 

Yes 

10,000      0 

— 

— 

— 

— 

_ 

_ 

_ 

_ 

— 

_ 

_ 

— 

Feb.       4,  1883 

880      0 

520      0 

117 

No 

_ 

8,000      0 

Feb.      19,  1850 

120      0 

120      0 

5 

Yes 

4,560      0 

Oct.      15,  1863 

4,000      0 

3,820      0 

180 

No 

200,000      0 

Dec.     24,  1868 

540      0 

540      0 

6 

Yes 

10,000      0 

84  A  MANUAL  OF 

The  Co-operative  Societies 


NAME  OF  THE  ASSOCIATION. 


French. 


English. 


69  Terrassiers  de  la  Seine, 

70|Tapis8iers  (Association  d'ouvriers),    . 

7liTypograpb.es  (Association  la  co-operation  des), 

72  Vanniers  (Association  co-operation  des  ouvriers),    . 


Terrace  makers, 
Working  nnholsterers, 
T 


Society  co-operative  immobiliere,        .... 

8ociet6    co-operative     (Construction     des    maisons 

ouvrieres), 


Typographers,    . 
Working  basketmake 

Society  for  loans  on  realty, 
Co-operative  building  society, 


The  total  number  of  associates  exhibited  by  the  foregoing 
table  is  4,920.  These,  with  the  auxiliaries  employed,  of  whom 
the  number  does  not  appear,  have  done  work  amounting  to 
£3,560,258  6-9.  The  total  paid  up  capital  shown  by  the 
table  is  £223,315  18s. 

These  societies  are  usually  administered  by  a  council,  acting 
through  an  executive  officer  who  is  termed  a  delegate  adminis- 
trator, director,  or  gerant.  As  might  be  expected  some  diffi- 
culty is  experienced  in  finding  capable,  active,  and  devoted 
managers,  and  earnest  and  prudent  councilmen.  Calmness, 
moderation,  and  perseverance,  qualities  essential  to  success,  are 
often  lacking  among  associates.  But,  nevertheless,  the  condi- 
tion of  the  societies  is  in  France  considered  promising  and  the 
outlook  is  thought  to  be  encouraging. 

It  will  be  noticed  that  in  many  cases  auxiliaries  do  not  share 
in  profits.  In  such  instances  the  organization  would  seem  to 
be  a  form  of  co-operative  partnership  composed  of  workingmen, 
who  share  with  each  other  profits  in  part  derived  from  the  labor 
of  auxiliaries  who  do  not  share  at  all.  When  the  profits  are 
thus  divided  solely  on  the  basis  of  shares  held  by  the  associates, 
the  organization  is  merely  that  of  a  joint  stock  company,  analo- 
gous to  the  Oldham  mills.  When  the  associates  also  share  as 
workers  an  additional  co-operative  step  is  taken,  and,  finally, 
when,  as  in  some  of  the  societies,  auxiliary  workers  are  per- 
mitted to  share  in  profits,  the  co-operative  features  become 
more  complete. 

The  auxiliaries  of  the  Carpenters  Association  of  La  Villette 
are  locksmiths,  sawyers  of  planks,  and  joiners.  Instead  of 


DISTRIBUTIVE  CO-OPERATION. 

of  Paris  —  Concluded. 


85 


Date  of 
Formation. 

CAPITAL. 

Number 
of  Asso- 

WHETHER AUXILIABIES 
SHARE  IN  PROFITS. 

Value  of  Work 
Done. 

Subscribed. 

Paid  up. 

ciates. 

No. 

Yes. 

£       8. 

£      s. 

£        «. 

Jan.        1,  1885 

80      0 

8      0 

6 

_ 

— 

Feb.      27,  1884 

294      0 

202    12 

96 

_ 

_ 

1,600      0 

Dec.     26,  1881 

400      0 

360      0 

24 

_ 

_ 

4,185      2 

Mar.       1,  1882 

80      0 

64      0 

18 

No 

- 

1,080      0 

Dec.     15,  1867 

5,600      0 

5,600      0 

369 

No 

- 

19,200      0 

participating  in  profits  they  are  paid  a  larger  wage  than  that 
allowed  by  private  employers.  Provision  is  also  made  for  an 
allowance  to  any  auxiliary  who  is  injured  while  at  work,  usu- 
ally amounting  to  one-half  the  customary  wage  for  the  time  the 
disability  continues. 

The  auxiliaries  employed  by  the  Association  of  Working  File 
Makers,  although  not  allowed  to  share  in  profits,  are  admitted 
as  associates,  without  the  payment  of  any  fee,  after  six  months' 
employment  by  the  society.  In  other  societies,  notably  the 
Association  of  Pianoforte  Makers,  a  similar  custom  prevails. 

Many  societies  have  a  fund  for  the  care  of  superannuated 
members,  for  insurance  in  case  of  accident  or  death,  etc.  Most 
have  certain  conditions  as  prerequisites  to  membership,  de- 
signed to  secure  the  moral,  physical,  and  industrial  fitness  of 
those  who  desire  to  join.  Some  require  candidates  to  serve  a 
period  of  probation  before  admission. 

The  mode  of  allotment  of  profits  varies.  In  some  societies  a 
fixed  rate  of  interest  is  paid  to  shareholders,  and  the  balance, 
after  providing  for  the  maintenance  of  reserves,  insurance,  and 
similar  funds,  if  any,  is  divided  among  associate  workers,  or 
among  associates  and  auxiliaries,  as  the  case  may  be.  Several 
societies,  which  permit  auxiliaries  to  share,  restrict  the  amount 
of  profit  out  of  which  such  share  must  be  paid.  For  instance, 
in  the  General  Society  of  French  Cabinet  Makers,  auxiliaries 
participate  in  25  per  cent  of  the  profits,  and  the  Society  of 
Furniture  Locksmiths  permit  auxiliaries  to  share  in  profits  in 
the  proportion  of  10  per  cent  on  the  proceeds  of  their  work. 
Some  societies  divide  all  profits  on  the  basis  of  work  performed. 


86  A  MANUAL  OF 

The  Association  of  File  Cutters,  in  the  division  of  profits, 
awards  to  capital  20  per  cent  and  to  labor  80  per  cent. 

CO-OPERATION  IN   GERMANY.* 

German  co-operation  has  three  modes  of  development,  viz : 
people's  banks,  consumers'  societies,  and  trade  societies.  Of 
these  the  people's  banks  —  a  form  of  co-operative  savings 
bank,  —  are  the  most  numerous,  the  trade  societies  ranking 
next.  In  1883,  the  number  of  each  class  was  as  follows  :  peo- 
ple's banks,  1,910;  trade  societies,  1,031 ;  consumers' societies, 
676. 

The  trade  societies  so-called  include  two  classes,  industrial 
societies  and  agricultural  societies.  These  may  be  more 
minutely  classified  as  follows  : 

Industrial  Societies. 

Raw  material  supply, 145 

Magazines,         ..........  59 

Productive,        .        .        . 149 

Agricultural  Societies. 

Agricultural  consumers'  supply 305 

Implement  supply  and  stock  raising, 171 

Productive  agriculture,     . 198 

Total  industrial  societies,  353  ;  total  agricultural  societies,  674  ; 
societies  not  included  under  the  foregoing  heads,  4  ;  aggregate, 
1,031. 

The  co-operative  movement  in  Germany  began  with  the  raw 
material  supply  associations  founded  by  Schulze-Delitzsch,  for 
the  purpose  of  enabling  handicraftsmen  in  different  trades  to 
purchase  by  wholesale  the  materials  required  in  the  prosecu- 
tion of  their  industries  so  as  to  allow  them  to  compete  with 
extensive  manufacturers.  The  object  of  these  societies  was  to 
uphold  hand  labor  against  the  encroachments  of  factory  indus- 
try, by  thus  obtaining  for  handworkers  through  association  the 
advantages  possessed  by  capitalists,  and  to  deliver  them  from, 
middlemen  who  furnished  inferior  material  at  high  prices. 

"Where   the  raw  material  societies   have  organized  themselves 
*  Authority :  Dr.  Schneider  of  Potsdam. 


DISTRIBUTIVE  CO-OPERATION.  87 

according  to  the  advice  of  Schulze-Delitzsck,  and  avoided  the  errors 
against  which  he  over  and  over  again  warned  them,  they  have  accom- 
plished this  object  to  the  benefit  of  the  German  handwork,  and  pre- 
served to  many  German  handicraftsmen  their  independent  businesses. 
If  we  consider  that,  according  to  the  trade  statistics  of  1882,  there 
were  in  the  shoemaking  trade  alone  245,118  independent  handwork- 
ers, who,  in  spite  of  the  prophecies  uttered  more  than  20  years  since 
by  Ferdinand  Lassalle  and  Karl  Marx,  still  carry  on  the  shoemaking 
business  on  their  own  account  and  will  not  consent  to  be  wage- 
receivers,  we  cannot  close  our  eyes  to  the  fact  that  millions  of 
Germans  have  the  most  pressing  interest  in  the  preservation  of 
handicrafts.  ********* 

The  raw  material  societies  of  the  handworkers  could  have  given 
greater  help  in  this  contest  if  several  of  them  had  not  ruined  them- 
selves by  grave  mistakes,  because,  unfortunately,  the  bad  custom  of 
the  handworker  giving  credit  —  sometimes  long  credit  —  to  his  cus- 
tomers, without  any  compensation,  is  widely  spread  in  Germany. 
The  workers  often  demanded  of  the  raw  material  societies  to  sell  to 
them  on  credit  at  the  same  price  as  if  they  had  paid  ready  money. 
Many  societies  have  given  way  to  this  unjustifiable  claim,  and  sunk 
under  the  consequent  loss  of  capital  and  interest.  Hence  the  num- 
ber of  raw  material  societies  is  not  increasing."  * 

The  145  raw  material  societies  included  the  following  trades  : 
joiners  and  instrument  makers,  21 ;  spinners  and  weavers,  17  ; 
meal  and  bread  producers,  14  ;  printers  and  lithographers,  11 ; 
tailors,  10;  brewers,  7;  butchers,  7;  carpenters  and  masons, 
6  ;  cigar  makers,  6 ;  clock  and  watch  makers,  distillers,  metal 
workers,  and  shoemakers,  5  each ;  machinists,  and  sugar 
makers,  4  each;  gilders  and  potters,  3  each;  brush  and  comb 
makers,  miners,  personal  services,  and  sewing  machine  makers, 
2  each;  bookbinders,  glass  makers,  plumbers  and  lacquerers, 
and  starch  makers,  1  eacb. 

The  industrial  magazines  are  co-operative  commission  con- 
cerns whose  business  it  is  to  sell  at  a  common  magazine  or 
depot  the  goods  produced  by  their  members.  The  larger  num- 
ber are  engaged  in  the  sale  of  carpenters  and  joiners'  products. 

The  industrial  productive  societies  are  mainly  confined  to 
hand  labor  and  to  the  smaller  industries.  A  notable  exception 
is  that  of  the  largest  German  manufactory  of  chronometers, 

*  Dr.  Schneider  of  Potsdam. 


88  A  MANUAL  OF 

which  is  conducted  on  the  co-operative  plan.  Co-operation 
when  applied  to  factory  labor  in  Germany  has  not  been  very 
successful. 


"Productive  societies  formed  for  the  purpose  of  selling  their  wares 
to  the  consumers'  societies,  and  supplied  with  capital  by  them  exist 
*  *  *  only  as  exceptions.  A  society  of  this  kind  was  the  Berlin 
Bakers'  Society,  which  long  since  came  to  grief  through  bad  manage- 
ment. Most  of  the  productive  societies  have  been  founded  without 
any  reference  to  the  wants  of  the  consumers'  societies,  by  small 
groups  of  artisans  or  laborers  who  were  all  to  be  at  once  employers 
and  workers.  The  business  of  the  society  was  their  only  source  of 
income.  If  anything  went  wrong  with  their  business,  all  the  mem- 
bers came  into  difficulty.  This  may  in  many  cases  have  bound  all 
the  members  together,  and  steeled  their  energies,  but  it  tended  also 
to  make  them  indisposed  to  the  admission  of  new  associates,  which 
naturally  came  into  question  only  when  the  business  was  again  going 
on  prosperously.  The  members  who  had  fought  through  the  time  of 
need  alone,  wished  alone  to  reap  the  fruits  of  the  good  time.  This 
was  not  associative,  and  was  vigorously  opposed  by  Schulze- 
Delitzsch,  but  it  was  natural,  and  explains  the  circumstance  that  in 
many  old  and  successful  productive  societies  the  number  of  members 
is  slowly  diminishing.  In  some,  though  this  is  not  publicly  known, 
the  number  of  members  has  shrunk  to  such  an  extent  that  they  are 
no  longer  societies,  but  have  become  trading  partnerships."  * 

The  agricultural  co-operative  societies  appear  to  be  quite 
successful  and  are  increasing. 

The  agricultural  consumers'  supply  societies  afford  their 
members  facilities  for  purchasing  in  common  seeds,  manures, 
etc.,  and  secure  to  them  the  advantage  of  subjecting  to  chemi- 
cal analysis  goods  offered  to  them  for  purchase,  so  as  to  test 
the  genuineness  of  the  articles.  Others,  existing  among  land- 
owners, known  as  implement  societies,  provide  agricultural 
machines  owned  in  common  and  loaned  to  members.  Still 
others  have  for  their  object  the  improvement  of  breeds  of  cattle, 
and,  finally,  the  productive  agricultural  societies  are  engaged  in 
dairying  and  wine  making. 

There  exists  in  Germany  a  co-operative  union  founded  by 
Schulze-Delitzsch,  and,  since  1883,  a  union  of  the  agricultural 

*  Dr.  Schneider. 


DISTRIBUTIVE  CO-OPERATION.  89 

societies,  having  for  its  special  object  the  advancement  of  this 
form  of  co-operation. 

Of  the  676  consumers'  societies  only  172,  having  a  total 
membership  of  110,433,  made  returns  in  1883.  These  present 
the  following  statement : 

Number  of  societies  making  returns, 172 

Number  of  members,  .' 110,433 

Total  sales, £1,634,215  2s. 

Average  sales  of  each  society,     ....               9,501  5s. 

Members' capital,         .        .        .        .        .        .           157,625  9s. 

Reserves, 73,883  13s. 

Loan  capital, 150,517  9s. 

Amount  owing  for  goods, 20,494  9s. 

Net  profits, 123,114  14s. 

Amount  due  from  members  (in  48  societies),    .               6,112  5s. 

Applied  to  educational  purposes,        .        .        .              1,250  9s. 

The  largest  consumers'  society  is  at  Breslau.  It  had,  in 
1883,  22,775  members,  and  during  that  year  its  sales  amounted 
to  £241,635  2s. ;  the  net  profit  being  £25,357  18s.  A  large 
steam  bakery  is  conducted  by  the  society. 

Building  societies  have  met  with  poor  success  in  Germany, 
and  have  been  unable  to  compete  with  private  enterprise. 

Dr.  Schneider  has  compiled  the  following  statistics  respect- 
ing the  membership  of  the  people's  banks  and  consumers' 
societies,  and  concerning  which  he  makes  this  statement : 

"I  add  a  tabular  view  of  the  composition  of  the  members  in  the 
people's  banks  and  consumers'  societies,  classified  according  to  their 
occupations,  whence  the  difference  in  the  character  of  these  two 
classes  of  societies,  notwithstanding  the  similarity  of  their  objects, 
appears.  The  members  of  the  raw  material  and  productive  societies 
belong,  with  few  exceptions,  to  the  corresponding  trades,  although, 
so  far  back  as  1868,  the  productive  societies  were  urged,  in  order  to 
increase  their  power  of  bearing  losses,  to  draw  in  non- workers  as 
members." 

The  table  shows  the  percentages  of  membership  of  each  class 
in  the  people's  banks  and  consumers'  societies  based  upon  the 
returns  for  1882  and  1883.  Dr.  Schneider  is  of  the  opinion 
that  had  the  statistics  covered  all  the  societies  instead  of  those 


90 


A  MANUAL  OF 


making  returns  only,  the  result  would  not  have  been  materially 
different. 

Classification   of   Membership   in   People's  Banks    and    Consumers' 

Societies. 


PEOPLE'S  BANKS. 

CONSUMERS'  SOCIETIES. 

Percentages  by  years. 

Percentages  by  years. 

CLASSIFICATION  OF  MEMBERSHIP. 

1883 

1883 

1883 

1883 

Independent  land  cultivators,    gardeners,  forest- 
ers   and  fishers                                                         • 

25.4 

25.4 

3.7 

3.7 

Assistants  and  laborers  of  the  foregoing, 

3.0 

3.1 

3.9 

3.87 

Manufacturers,  and  persons  engaged  in  mining 

and  building 

3.65 

3.6 

1.6 

1.7 

Independent  handworkers,       

31.2 

30.9 

15.3 

15.0 

Workers  in  factories    and    mines,  and  assistants 

of  handworkers 

4.7 

4.8 

40.4 

41.2 

Independent  traders  and  dealers  

9.6 

9.6 

4.0 

4.0 

Clerks  and  assistants  to  traders,      .... 

0.7 

0.7 

1.6 

1.4 

Carriers,  shipowners,  and  innkeepers,  . 
Letter  carriers,  employes  in   railway,  telegraph, 

5.2 

5.1 

2.5 

2.4 

and  post  offices,  laborers  on  railways,  mariners, 

and  waiters,    ........ 

1.9 

1.9 

7.7 

7.2 

Male  and  female  servants,        

1.6 

1.0 

1.7 

2.8 

Physicians,  apothecaries,  teachers,  artists,  writ- 
ers, officials   of    church,    state,   or    municipal 

bodies,     

6.7 

6.7 

10.5 

10.8 

Persons  of  independent  income, 

7.4 

7.6 

7.1 

6.5 

Number  of  societies  making  returns,     . 

819 

825 

166 

160 

CO-OPERATION  IN  AUSTRIA.* 

In  Austria,  the  statute  of  November  26,  1852,  permitted 
the  formation  of  co-operative  societies  with  unlimited  liability. 
An  important  change  was  effected  by  the  law  of  July  1,  1873, 
which  required  all  societies  « '  the  number  of  whose  members 
is  unlimited,  which  seek  to  benefit  their  members  in  their  trade 
or  household  economy  by  carrying  on  business  in  common  "  to 
register  at  the  government  registration  office.  Such  societies 
may  be  organized  ' '  either  with  or  without  limitation  of  liabil- 
ity, as  they  determine,  the  measure  of  liability  in  the  first  case 
being  fixed  by  their  rules." 

Unregistered  societies  formed  under  the  previous  law  must 
register  upon  making  any  change  in  their  rules  and  are  gradu- 
aly  becoming  extinguished.  By  a  subsequent  statute,  Jan- 
uary 1,  1880,  societies  which  confine  their  dealings  to  their 
own  members  are  exempt  from  the  traders'  tax.  Income  tax 


*  Authority :  Dr.  H.  Ziller,  of  the  Austrian  Co-operative  Union. 


DISTRIBUTIVE  CO-OPERATION.  91 

is  levied  on  their  net  profits,  with  exemptions  and  allowances 
when  the  yearly  income  is  less  than  2,300  florins. 

According  to  the  report  of  Dr.  Ziller,  who  is  at  the  head  of 
the  co-operative  societies  formed  in  the  Austrian  empire,  the 
total  number  of  such  societies  within  Austrian  territory  in  1881 
was  1,515.  Of  these,  317  were  unregistered  and  1,198  regis- 
tered. Five  hundred  and  seventy-two  registered  societies  were 
with  limited  liability  and  626  unlimited.  One  thousand  one 
hundred  and  twenty-nine,  or  74.5  per  cent  of  all  the  societies, 
were  people's  banks ;  two  hundred  and  thirty-five,  or  15.5  per 
cent,  were  distributive  societies ;  and  the  balance  were  as  fol- 
lows :  raw  material  supply,  6 ;  agricultural  material  supply, 
14 ;  stores,  3  ;  artisan  productive,  41 ;  agricultural  productive, 
61 ;  building,  5  ;  trading,  10  ;  assurance,  2  ;  various,  9.  These 
statistics  include  Lower  and  Upper  Austria ;  Lutzburg ;  the 
Tyrol ;  Vorarlberg  ;  Styria  ;  Carinthia  ;  Krain  ;  the  Coast  Land  ; 
Bohemia ;  Moravia  ;  Silesia ;  Galicia ;  Bukowina  ;  and  Dal- 
matia. 

Co-operative  distribution  does  not  appear  to  be  very  flourish- 
ing. It  is  stated  that  the  number  of  such  societies  is  scarcely 
half  that  formerly  existing.  The  reasons  given  for  the  failure 
of  those  that  have  been  dissolved  are  commercial  depressions 
affecting  the  earnings  of  those  connected  with  them,  heavy 
taxes  assessed  on  them  as  traders  in  certain  districts,  and  bad 
management  of  a  large  number  which  were  formed  for  political 
purposes. 

Besides  the  societies  which  deal  in  the  usual  groceries  in 
common  demand,  a  few  grind  corn,  some  hare  bakeries  at- 
tached, and  some  sell  butcher's  meat ;  but  the  latter  has  not 
generally  been  found  profitable.  Most  of  the  societies  sell 
beer  and  spirits.  Drapery  and  shoes,  crockery,  hardware, 
and  wooden  goods  are  supplied  by  some.  The  credit  system 
exists  and  the  practice  of  giving  credit  appears  to  be  increas- 
ing. As  a  consequence  the  societies  which  made  returns  were 
owing  more  than  33  per  cent  of  the  value  of  their  stock  in 
trade.  Less  than  half  the  societies  made  returns  for  the  year 
1881,  and  some  of  these  returns  were  imperfect.  Of  those 
that  made  returns  the  average  membership  was  630.  The  in- 
formation as  to  application  of  profits  was  especially  defective. 
The  following  general  statement  is  made  : 


92  A  MANUAL  OF 

"  Many  societies,  which  sell  at  the  lowest  practicable  prices,  make 
no  division  of  profits,  but  carry  them  wholly  to  reserve.  Others, 
which  sell  only  to  their  own  members,  have  introduced  the  practice 
of  distributing  profits  as  dividend  on  purchases,  with  very  favorable 
results  in  their  business,  which  are  more  favorable  than  tl\ose  ob- 
tained in  the  earlier  method,  adopted  from  the  practice  of  the 
people's  banks,  of  dividing  the  profits  in  proportion  to  the  paid-up 
capital,  which  is  preserved  in  the  case  of  the  profits  from  the  sales 
to  non-members." 

Of  the  artisans'  productive  societies  many,  it  is  stated,  have 
failed  because  formed  to  take  control  of  private  enterprises 
that  had  not  been  successful.  When  formed  independently  by 
workers  possessing  sufficient  capital  to  enable  them  to  avoid 
debt  they  have  succeeded  when  there  was  a  fair  opening  for 
business.  Some  have  failed  on  account  of  internal  dissensions. 
Although  41  productive  societies  of  the  artisan  class  are  in- 
cluded in  the  statistics  we  have  quoted,  only  12  made  returns 
for  the  year,  and  the  details  are  too  meagre  to  afford  much 
light  as  to  the  general  condition  of  all  the  societies.  Taxation, 
in  the  form  of  trading  licenses,  appears  to  seriously  interfere 
with  the  prosperity  of  these  societies  and,  for  local  reasons,  to 
discriminate  against  them  as  compared  with  private  concerns. 

Most  of  the  agricultural  productive  societies  confine  their 
operations  to  dairying.  Scarcely  any  details  appear  as  to 
these  or  the  other  societies  enumerated,  very  few  having  made 
returns. 

CO-OPERATION  IN  DENMARK.* 

Co-operation  in  this  country  appears  to  be  confined  to  con- 
sumers' distributive  societies.  About  150  such  societies  are 
believed  to  exist.  Seventy  have  been  grouped  in  a  wholesale 
union. 

The  source  of  co-operative  effort  here  seems  to  have  been 
the  English  societies,  the  success  of  which  impressed  the  late 
Pastor  Sonne,  who  published  a  work  entitled  "Workmen's 
Co-operative  Societies  in  England,"  thus  leading  directly  to  the 
formation  of  Danish  societies.  Since  the  year  1870,  the  move- 
ment has  grown  in  importance  and  appears  likely  to  increase 

*  Authority :    Mr.  J.  Andrew  of  the  Co-operative  Wholesale  Society,  Copenhagen. 


DISTRIBUTIVE  CO-OPERATION.  93 

still  farther  under  the  present  organization.  A  monthly 
periodical  devoted  to  the  interests  of  co-operators  is  now 
issued  by  the  wholesale  society. 

CO-OPERATION  IN  SPAIN.* 

Co-operation  has  as  yet  made  no  progress  in  Spain.  One  or 
two  small  associations  exist,  but  not  in  a  very  flourishing  con- 
dition. A  society  established  at  Bilbao,  and  also  one  in  Gijon, 
soon  failed  on  account  of  bad  management. 

CO-OPERATION  IN  HUNGARY.f 

Distributive  co-operation  in  Hungary,  although  instituted 
some  years  ago,  has  made  little  progress.  Of  late  slightly 
more  life  has  been  apparent  in  the  movement,  but  statistics 
respecting  it  are  very  scanty.  The  statistical  bureau  of  Hun- 
gary has  no  data  upon  the  subject. 

Productive  societies  are  not  numerous,  the  chief  examples 
existing  in  Buda-Pesth.  The  chief  avenue  of  co-operative  effort 
is  the  system  of  banking  analogous  to  that  of  Germany. 

Dr.  Ziller,  of  the  Austrian  Co-operative  Union,  has  presented 
the  following  statistics  for  the  societies  in  Hungary,  Croatia, 
and  Slavonia,  in  the  year  1883  :  Total  number  of  societies, 
357  ;  people's  banks,  308  ;  consumers'  societies,  16  ;  raw  ma- 
terial supply,  2;  depots  (for  selling),  3;  agricultural  aid 
societies,  2  ;  artisans'  productive  societies,  6  ;  agricultural  pro- 
ductive societies,  7  ;  assurance  societies,  8 ;  miscellaneous,  5. 

Five  of  the  consumers'  societies  show  collective  sales  amount- 
ing to  234,468  florins;  share  capital,  33,231  florins;  reserve 
fund,  33,561  florins;  loans,  1,822  florins;  indebtedness  for 
goods,  6,222  florins;  value  of  stock  at  end  of  year,  45,228 
florins ;  due  from  members  for  goods  sold  on  credit,  17,288 
florins. 

The  credit  system  universally  prevails.  The  artisans'  pro- 
ductive societies  represent  the  following  trades  :  Clothmakers, 
2 ;  brewers,  marble  workers,  iron  workers,  and  lockmakers,  1 
each. 

*  Authority :    Mr.  Robt.  R.  Evans,  English  Consul,  Bilbao. 

t  Authorities :    Dr.  Stephen  Bernat,  of  the  Ministry  of  Agriculture,  Buda-Pesth.    Dr. 
H.  Ziller,  of  the  Austrian  Co-operative  Union. 


94  A  MANUAL  OF 

The  agricultural  productive  societies  represent  dairying, 
vine  culture,  and  the  production  of  silk. 

CO-OPERATION  IN  ITALY.* 

The  co-operative  movement  in  Italy  began  with  the  political 
unification  of  the  country,  as  part  of  the  general  progress  of 
the  time.  People's  banks  upon  substantially  the  German  model 
were  among  the  first,  and  are  to-day  leading  examples  of  Italian 
co-operative  effort.  They  have  increased  from  4  in  1865  to  252 
in  1883,  the  capital  in  the  latter  year  being  about  £2,120,000. 
They  have  been  very  successful,  and  of  great  benefit  to  certain 
classes,  chiefly  the  middle  class  traders  and  artisans,  but  have 
not  materially  aided  laborers,  or  the  masses  of  the  working 
population.  Other  forms  of  co-operative  credit  and  savings 
institutions  are  in  progress  or  contemplated,  among  others  the 
following : 

UA  certain  number  of  small  agriculturists,  generally  the  very 
smallest  proprietors  or  farmers,  unite  themselves  into  a  society  with 
unlimited  liability.  On  this  guarantee  the  society  contracts  loans  at 
the  lowest  attainable  rate  of  interest,  and  out  of  the  sum  thus  col- 
lected makes  advances  to  their  members  who  apply  for  them,  at  a 
somewhat  higher  rate.  The  bank  is  to  act  also  as  a  savings  bank. 
These  institutions  are  specially  agricultural,  and  satisfy  the  need  for 
small  advances,  at  long  periods  of  repayment,  keenly  felt  by  a  class  of 
agriculturists  numerous  in  the  Italian  provinces,  that  of  the  small 
proprietors  who  cultivate  their  own  land,  of  the  small  farmers,  and 
also,  in  certain  cases,  of  the  agricultural  laborers,  who  sometimes 
cultivate  a  field  on  their  own  account."! 

With  these  banks  agricultural  clubs  are  sometimes  united. 

Distributive  co-operation  is  in  Italy  well  known,  but  the 
movement  in  this  direction  lacks  organization.  The  mode  of 
administering  such  societies  varies.  Some  are  conducted  on  the 
Rochdale  plan.  Others  are  workingmen's  societies  providing 
various  kinds  of  provisions  for  members  exclusively.  A  still 
different  class  are  associations  securing  special  rates  for  their 
members  upon  purchases  from  private  shopkeepers.  About 

*  Authority :  Dr.  Ugo  Rabbcno,  Reggio  Emilia,  Italy. 

t  Rabbeno.    Co-operation  in  Italy.    Translated  by  E.  V.  Nealc.    Co-operative  Print- 
ing Society,  Manchester,  England. 


DISTRIBUTIVE  CO-OPERATION.  95 

8,000  persons  united  in  societies  upon  the  latter  basis  in  1880. 
There  is  still  another  class  formed  by  railway  employes,  for  the 
purpose  of  obtaining  provisions  of  good  quality  at  low  prices. 
These  are  joint  stock  societies  analogous  to  the  civil  service 
supply  societies  of  England.  The  first  association  of  the  sort 
was  founded  at  Turin,  in  1873,  with  53  members  and  a  small 
capital.  In  1883  it  had  2,307  members  and  more  than  900 
associates,  its  sales  amounting  to  about  £40,000  in  that  year. 
Similar  societies,  all  of  which  have  made  rapid  progress,  exist 
at  Milan,  Florence,  Naples,  Sampler  d' Arena,  Genoa,  Verona, 
and  elsewhere.  In  general,  they  sell  at  the  lowest  possible 
prices,  pay  no  interest  on  shares,  confine  their  sales  to  their 
own  members,  and  carry  the  meagre  proht  upon  sales  to  a 
reserve  fund. 

The  general  consumers'  societies  were  at  first  based  on  the 
Rochdale  plan,  but  owing  to  differences  in  national  character- 
istics this  plan  was  not  generally  successful  in  Italy,  and  at 
present  the  greater  number  do  not  attempt  to  pay  to  their  cus- 
tomers dividends  on  purchases  as  do  the  English  societies,  but 
rather  endeavor  to  sell  *at  lower  than  ordinary  market  prices, 
carrying  profits  to  a  dividend  on  stock.  The  chief  advantage 
derived  from  such  societies  is  considered  to  be  their  restraining 
effect  upon  private  retail  shopkeepers,  compelling  the  latter  by 
force  of  competition  to  sell  their  goods  at  fair  prices.  The 
range  of  goods  supplied  is  narrow,  being  principally  confined 
to  bread,  flour,  grain,  vegetables,  macaroni,  and  vermicelli. 
In  some  cases,  meat  and  fish  are  added. 

The  number  of  consumers'  societies  in  1878  was  ascertained 
by  government  inquiry  to  be  58,  and  they  are  supposed  to 
have  considerably  increased  in  number  since,  but  no  definite 
statistics  exist. 

Dr.  Rabbeno,  while  taking  a  hopeful  view  of  the  progress  of 
distributive  co-operation,  after  mentioning  certain  localities  in 
which  from  his  personal  knowledge  such  progress  has  been 
marked,  conservatively  adds : 

"  With  all  this  we  must  not  delude  ourselves,  nor  take  refuge 
in  equivocal  statements.  Co-operation  for  consumption,  as  it  is 
practised  in  Italy,  exercises  a  beneficial  influence,  especially  by  con- 
tributing to  keep  down  the  prices  of  articles  of  first  necessity.  But 


96  A  MANUAL  OF 

this  influence  is  very  limited.  Besides,  the  greater  part  of  the 
Italian  consumers'  societies  are  not  very  flourishing.  They  lead  a 
rather  straitened  life.  On  the  whole,  co-operation  for  consumption 
in  Italy  is  not  yet  a  success.  We  may  hope  that  it  will  become 
such."* 

In  commenting  upon  this,  Mr.  Neale,  Secretary  of  the  Eng- 
lish Co-operative  Union,  remarks  : 

"The  people's  banks  appear  to  me  to  form  in  Italy  indirectly  a 
serious  hindrance  to  the  spread  of  co-operation  for  consumption. 
By  furnishing,  through  the  credit  given  by  them,  a  support  to  the 
small  traders,  they  make  the  triumph  of  co-operation,  which  is  in 
continual  conflict  with  this  class  of  traders,  more  difficult." 

In  the  country  districts  of  Lower  Lombardy  a  system  of  co- 
operative bakeries  exists,  founded  by  Rinaldo  Anelli,  a  priest 
of  the^village  of  Bernate  Ticino.  The  farmers  and  farm  labor- 
ers suffered  from  poor  food  owing  to  insufficient  means  for 
individually  drying  and  preserving  the  grain  from  mould, 
especially  during  wet  seasons,  although  it  formed  their  chief 
reliance  for  subsistence.  To  meet  this  peculiarly  local  need 
Anelli  said  to  the  agriculturists  : 

"  We  will  construct  a  bakehouse.  You  shall  bring  to  this  bake- 
house your  grain.  Here  we  intend  to  get  it  well  dried  that  it  may 
keep  well.  We  will  make  a  contract  with  the  miller  to  grind  it  on 
fair  terms.  We  will  make  it  into  bread  on  the  best  system  and  in 
the  most  economical  manner ;  and  we  will  give  you  as  many  loaves 
of  bread  as  will  correspond  to  the  corn  that  you  have  brought."  * 

The  instant  success  of  the  scheme,  which  has  been  elsewhere 
copied,  affords  a  marked  instance  of  the  advantages  of  mutual 
effort  under  certain  favorable  conditions. 

Productive  co-operation  is  limited  to  a  few  societies,  and, 
although  some  success  is  to  be  noted,  is  still  in  the  experi- 
mental stage.  The  oldest  and  most  important  society  is  the 
Artistic  Glass  Society  of  Altare,  founded  in  1856,  and  for  a 
time  subjected  to  government  opposition.  Its  original  capital 
was  only  14,385  lire,  about  £463,  but  the  members  by  carry- 

*  Co-operation  in  Italy. 


DISTKIBUTIVE  CO-OPERATION.  97 

ing  to  capital  monthly  instalments  of  their  wages  increased  it 
rapidly  until,  in  1883,  it  amounted  to  about  £16,639.  The 
value  of  product  in  the  latter  year  was  about  £21,196. 

The  Co-operative  Labor  Society  at  Ismola,  manufacturing 
earthenware  and  kitchen  utensils,  was  founded  in  1874  by 
Guiseppe  Bucci,  who  gave  up  to  his  workmen  his  own  estab- 
lishment, for  which  they  paid  him  by  instalments.  It  has  been 
reasonably  successful. 

In  Bologna  there  are  six  productive  societies  engaged  in 
hemp  dressing,  shoemaking,  building  and  woodworking, 
leather  cutting,  glove  making,  and  printing.  They  are  all 
small,  but  are  said  to  be  exerting  a  good  influence.  At  Milan, 
there  is  a  co-operative  society  of  marble  workers,  and  one  of 
laundresses ;  at  Bandeno,  one  of  weavers ;  at  Schio,  one  en- 
gaged in  railway  and  tramway  construction,  and  at  Turin,  one 
of  working  tailors,  dressmakers  and  sempstresses. 

The  customary  division  of  profits  is  between  shareholders 
and  workers.  At  Altare  and  Ismola  three  per  cent  is  first 
paid  to  shareholders,  and  of  the  remaining  profit  30  per  cent 
is  carried  to  a  reserve  fund ;  25  per  cent  to  a  subsidy  fund  ;  30 
per  cent  to  shareholders,  and  15  per  cent  to  workers  in  propor- 
tion to  the  number  of  days  each  has  worked.  Members  must 
become  shareholders  within  four  years  or  leave  the  society,  a 
requirement  that  eliminates  the  thriftless  and  undeserving. 

Another  form  of  productive  co-operation  in  Italy  should  be 
noticed, —  the  co-operative  associations  of  day  laborers.  These 
arose  among  the  agricultural  workers  of  Rornagna,  and  they 
had  in  view  the  emancipation  of  field  laborers  from  the  power 
of  contractors  whose  custom  it  was  to  control  every  extensive 
operation  in  road  making,  earthwork,  etc.  ;  farming  out  the 
work  to  sub-contractors  and  reducing  wages  to  the  lowest  point 
so  as  to  swell  profits  to  themselves  without  regard  to  the  rights 
of  the  laborers  dependent  upon  them.  The  work,  it  will  be 
seen,  is  very  simple,  requiring  little  capital  and  limited  skill, 
thus  rendering  it  easy  of  performance  upon  the  co-operative 
plan.  The  meagre  capital  required  was  readily  obtained  by 
savings  from  wages,  the  par  value  of  shares  being  placed  at  a  > 
low  figure.  Almost  the  only  outlay  required  was  for  pickaxes, 
barrows,  etc.,  and  in  many  cases  these  were  already  possessed 
by  the  workmen.  The  plan  of  operation  was  simple.  Large 


98  A  MANUAL  OF 

contracts  are  taken  by  the  society  at  fixed  rates,  and  sublet  in 
'sections  to  members,  who  work  by  the  piece.  By  this  plan 
individual  remuneration  is  in  proportion  to  the  work  performed. 
The  workers  become  directly  interested  in  the  work  and  their 
efficiency  is  proportionately  increased.  The  middleman  is 
abolished,  and  the  laborer  is  brought  into  immediate  relations 
with  the  proprietor  who  controls  the  undertaking.  Under 
these  advantages  men  who  previously  earned  from  l\d.  to 
Is.  2^d.  a  day  have  increased  their  wages  to  2s.  5d.,  and  in 
some  cases  to  3s.  2\d.  or  4s.  daily.  The  first  association  of 
this  sort,  formed  at  Ravenna  with  300  members,  grew  to  a 
membership  of  3,000  within  a  year.  Others  upon  the  same 
plan  are  working  well. 

CO-OPERATION  IN   SWEDEN.* 

Co-operation  in  Sweden,  as  in  Norway  and  Finland,  is  still 
awaiting  development,  but  owing  principally  to  the  efforts  of 
Lars  Oscar  Smith,  a  wealthy  manufacturer  of  Stockholm,  its 
future  is  hopeful.  Mr.  Smith  became  interested  in  the  subject 
by  the  study  of  foreign  experiments,  and  especially  by  wit- 
nessing what  had  been  accomplished  in  Great  Britain.  He  first 
formed  in  Stockholm  the  Sattskapet  Arbetarnes  Ring,  or  Work- 
men's Ring  Society,  and  inspired  by  this  example,  80  similar 
societies  sprang  up  in  the  Swedish  provinces.  An  important 
object  of  these  societies  was  emancipation  from  the  "ring" 
rule  carried  on  by  the  combined  proprietors  of  brandy  shops 
and  public  houses. 

The  original  Workmen's  Ring  Society,  after  variations  of 
fortune,  was  incorporated  during  October,  1884,  under  the 
name  of  the  Aktiebolaget  Arbetarnes  Ring,  or  Workmen's 
Ring  Society,  limited.  In  its  corporate  organization  this  soci- 
ety consists  of  two  sections,  A  and  B  ;  the  first  a  wholesale  and 
the  last  a  retail  department.  To  aid  the  society,  in  whose  wel- 
fare he  was  deeply  interested,  Mr.  Smith  supplied  the  capital 
which  the  workmen  lacked  requisite  to  conduct  the  wholesale 
department,  viz.,  100,000  Swedish  crowns,  representing  20,000 
shares.  The  Section  B,  retail,  is  provided  with  capital  upon 

*  Authority :  Mr.  A.  W.  Schulinan,  of  the  Aktiebolaget  Arbetarnes  Ring,  Stock- 
holm. 


DISTRIBUTIVE  CO-OPERATION.  99 

the  basis  of  five  crown  shares  in  groups  of  500  shares  each, 
only  one  share  to  be  held  by  each  member.  Mr.  Smith's  con- 
nection is  upon  the  following  terms  :  six  per  cent  is  to  be  paid 
him  upon  his  investment;  the  balance  of  profits  acquired  in 
both  sections  is  to  be  carried  to  a  reserve  fund  until  the  latter 
becomes  100,000  crowns,  whereupon  the  reserve  is  to  be  used 
in  taking  up  the  shares  held  by  Mr.  Smith,  who  is  to  go  out  of 
the  concern.  By  this  plan  the  shareholders  of  Section  B  will 
ultimately  acquire  the  wholesale  business  of  Section  A  out  of 
the  profits  arising  from  their  trade. 

The  sections  are  governed  by  committees.  Whenever  a 
sufficient  number  of  persons  will  subscribe  to  take  up  a  group 
or  block  of  shares  in  Section  B,  and  will  pledge  themselves  to 
support  a  store  operated  by  the  capital  thus  supplied,  such  a 
store  is  to  be  opened,  and  becomes  a  department  of  the  society. 
The  retail  section  therefore  admits  of  indefinite  extension,  al- 
though, as  the  organization  is  recent,  few  stores  have  yet  been 
started.  In  general  features  the  organization  is  based  upon 
that  of  the  English  societies,  that  is,  a  wholesale  department 
intended  ultimately  to  be  owned  and  operated  by  a  federation 
composed  of  numerous  retail  associations.  Unlike  the  English 
stores  which  began  with  the  retail  departments  and  by  natural 
growth  developed  their  present  complete  organization,  the 
Swedish  societies,  by  the  aid  of  the  capital  supplied  by  Mr. 
Smith,  have  at  once  the  advantages  of  a  wholesale  department, 
with  the  possibility  of  acquiring  its  full  ownership  in  the  future. 

The  business  of  the  Swedish  Workmen's  Ring  is  at  present 
confined  to  groceries  and  the  products  of  butchering,  together 
with  a  co-operative  steam  kitchen  for  workingmen,  originally 
established  by  Mr.  Smith  but  now  operated  as  a  department  of 
the  society. 

Mr.  Smith  is  also  the  promoter  of  a  co-operative  banking 
society,  the  Aktiebolaget  Arbetareingens  Bank,  having  a  cap- 
ital of  more  than  300,000  Swedish  crowns,  in  shares  of  25 
crowns  (£1  8s.)  each,  one  fifth  held  by  Mr.  Smith  and  the 
balance  held  by  about  8,500  workingmen. 


100  A  MANUAL  OF 


CO-OPERATION  IN  SWITZERLAND.* 

About  130  distributive  societies  are  in  operation  in  Switzer- 
land, of  which  nine  only  existed  prior  to  1860.  The  larger 
number  are  in  the  cantons  of  Zurich,  Bern,  Saint  Gallen,  Neu- 
chatel,  and  Glarus,  though  some  are  found  in  every  canton 
except  Schwytz,  Uri,  Unterwald,  and  Appenzell-Interieur. 

The  majority  of  the  societies,  according  to  their  professions, 
place  chief  stress  upon  securing  supplies  free  from  adulteration, 
and  the  moral  advantages  of  co-operation,  rather  than  upon 
low  prices.  These  are  mainly  conducted  by  the  German- 
speaking  population.  On  the  other  hand,  the  minority  aim  at 
low  prices  chiefly,  and  of  these  three-fourths  are  French. 

The  capital  invested  in  the  societies  is  approximately  as  fol- 
lows : 

Share  capital,  109  societies,         ....  1,973,779  francs. 

Keserve  fund,  83  societies,   .        .        .        .        .  722,528  francs. 

Bond  investments,  9  societies,      ....  430,921  francs. 

Total 3,127,228  francs. 

Societies  not  represented  in  the  above  returns  would,  if  in- 
cluded, probably  enlarge  the  total  to  3,250,000  francs.  The 
total  number  of  shareholding  members  has  been  estimated  at 
30,000,  the  total  annual  sales  at  13,000,000  francs,  and  the 
total  annual  profits  at  1,500,000  francs.  The  moral  results 
attending  co-operation  in  England  also  appear  in  Switzerland. 
No  Swiss  co-operative  union  has  yet  been  established. 

CO-OPERATION  IN  THE  NETHERLANDS,  f 

Co-operative  societies  in  the  Netherlands  have  a  legal  sanc- 
tion in  the  statute  of  November  17,  1876,  and,  although  a  few 
societies  had  been  founded  previously,  the  progress  of  the 
movement  rests  upon  this  statute. 

The  General  Dutch  Workmen's  Union  (Het  Algemeen  Neder- 
landsch  Werkliedenverbond)  and  the  Society  for  Self  Help 
(Vereeniging  Eigen  Hulp)  are  corporations  founded  for  the 
purpose  of  promoting  co-operative  societies  and  extending  co- 

*  Authority :  The  Journal  de  Geneve,  March  6,  1884. 
f  Authority:   J.  Th.  Braun,  of  the  Hague. 


DISTRIBUTIVE  CO-OPERATION.  101 

operative  principles.  The  first  has  its  headquarters  at  Amster- 
dam, and  the  latter  at  the  Hague.  Both  maintain  newspaper 
organs. 

The  following  co-operative  societies  have  been  established 
since  1876  : 

Co-operative  savings  and  advancing  banks,       ....  8 

Consumers1  societies, 23 

Co-operative  bakeries, 2 

Co-operative  butchering  establishment, 1 

Building  societies, 13 

Agricultural  societies, 3 

Society  for  managing  funerals  (undertakers),    ....  1 

Total 51 

Divisions  of  the  Workmen's  Union  exist  in  several  towns  and 
have  founded  small  associations  administered  under  domestic 
rules  and  not  incorporated.  The  co-operative  savings  and 
advancing  banks  are  located  at  Amsterdam,  The  Hague,  Leeu- 
warden,  Middleburg,  Goes,  Enschede,  and  Veendam. 

Most  of  the  consumers'  societies  are  upon  the  limited  liability 
plan.  The  cash  system  is  generally  adhered  to.  Some  sell 
only  to  members  at  as  low  rates  as  possible.*  Others  sell  to 
every  one  and  divide  profits  among  members  yearly  in  propor- 
tion to  consumption,  allowing  undrawn  dividends  to  remain 
on  interest,  f 

The  two  co-operative  bakeries  enumerated  are  in  successful 
operation  at  the  Hague  and  at  Koog  aan  de  Zaan  (North  Hol- 
land) respectively.  At  the  Hague,  members  upon  joining  pay 
Is.  Sd.  In  April,  1885,  the  society  had  1,050  members. 
Dividends  are  paid  in  bread  during  the  year  as  demanded, 
each  member's  dividend  being  in  proportion  to  his  consumption 
during  the  previous  year.  At  Koog,  the  yearly  surplus  is 
divided  among  widows  of  deceased  members,  upon  the  basis  of 
the  consumption  of  the  recipient  during  the  previous  year. 

The  agricultural  societies  conduct  the  business  of  transport- 
ing and  selling  farm  produce  for  the  common  account  of  mem- 
bers, in  foreign  and  native  markets ;  besides  which  one  society 
has  a  productive  character. 


*  Civil  service  plan. 

f  Somewhat  similar  to  the  Rochdale  plan. 


102  A  MANUAL  OF 

The  co-operative  associations  that  belong  to  the  Society  for 
Self  Help  have  a  common  agency  for  the  purchase  of  supplies 
in  the  Gezamelyke  InJcoop  van  Eigen  Hulp,  at  Eotterdam, 
which,  though  loosely  organized,  is  really  the  germ  of  a  whole- 
sale society. 

A  division  of  the  Society  for  Self  Help  devotes  itself  to  the 
dissemination  of  supplies  among  army  and  navy  officers,  and  is 
similar  to  the  army  and  navy  supply  societies  in  England, 
although  at  present  rather  limited  in  its  operations. 


CO-OPERATION  IN   AUSTRALIA.* 

The  leading  co-operative  society  in  Australia  is  the  Equitable 
Co-operative  Society,  of  Melbourne,  administered  on  the  Roch- 
dale plan.  Business  was  begun  in  1882,  and  certain  errors  of 
management  due  to  inexperience  having  been  remedied,  the 
society  is  now  firmly  established  and  progressing  rapidly. 
Early  in  the  present  year,  1885,  the  number  of  members  was 
1,990;  paid  up  capital,  £46,100;  and  deposits,  £7,000,  draw- 
ing interest  at  five  per  cent. 

The  departments  include  groceries,  hardware,  wines  and 
spirits,  crockery,  boots  and  shoes,  drugs  and  chemicals,  sta- 
tionery, drapery,  millinery,  carpets  and  upholstery,  tailoring 
and  dressmaking.  The  number  of  employes  in  the  distributive 
service  is  about  90,  one-third  of  whom  are  boys  and  girls. 
About  56  productive  employes  are  also  engaged.  A  monthly 
journal,  called  the  Equitable  Co-operator,  is  published  by  the 
society  in  its  interests  and  circulated  free  of  charge.  Goods 
are  delivered  free  to  purchasers  in  Melbourne  and  suburbs. 
An  experienced  buyer  is  employed  in  London,  and  about  one- 
half  the  stock  in  trade  is  imported. 

Some  other  distributive  societies  exist  in  Australia,  called 
co-operative,  but  mostly  upon  the  joint  stock  plan.  Under  the 
influence  of  the  Equitable  Society  co-operation  in  that  country 
will  no  doubt  be  further  developed. 

*  Authority :  Mr.  William  Nuttall,  Secretary  of  the  Equitable  Co-operative  Society, 
Melbourne. 


DISTRIBUTIVE  CO-OPERATION.  103 


THE     ARLINGTON    CO-OPERATIVE    ASSOCIATION, 
AT  LAWRENCE,  MASS. 

Distributive  co-operation  in  the  United  States  has  been  tried 
upon  various  plans,  notably  under  the  patronage  of  the  Sov- 
ereigns of  Industry,  Patrons  of  Husbandry,  Knights  of  Labor, 
and  similar  organizations.  Being  in  most  instances  incidental 
only  to  the  main  purpose  of  such  orders,  the  fate  of  these  dis- 
tributive stores  has  usually  been  determined  by  the  success  or 
failure  of  the  primary  objects  of  the  organization. 

In  Texas  a  co-operative  wholesale  society  and  about  150 
retail  stores  are  in  existence  in  connection  with  the  order  of 
Patrons  of  Husbandry.*  Isolated  experiments,  not  successful, 
have  been  made  in  New  York  City  and  in  Brooklyn.  The 
Arlington  Co-operative  Association,  at  Lawrence,  Mass.,  how- 
ever, furnishes  an  example  of  successful  American  distributive 
co-operation  on  substantially  the  Rochdale  plan. 

The  association  is  limited  to  employes  of  the  Arlington  mills. 
In  this  feature  of  limitation  the  plan  of  the  English  stores  is 
not  adhered  to,  as  membership  in  the  latter  is  not  restricted. 
Officers  are  elected  annually,  consisting  of  a  secretary,  treas- 
urer, and  ten  directors,  one  of  whom  is  chosen  president  by  the 
board,  and  regular  quarterly  meetings  are  held.  Special  meet- 
ings may  be  called  by  the  president  with  the  consent  of  a 
majority  of  the  directors,  and  must  be  called  upon  the  written 
request  of  ten  members.  Auditors  are  chosen  annually  by  the 
stockholders  by  ballot.  The  manager  of  the  store  is  selected 
by  the  directors,  and  is  at  present  a  thoroughly  competent  per- 
son trained  in  the  principles  of  distributive  co-operation  in 
England. 

The  administration  of  the  society  is  similar  to  that  of  the 
English  societies  which  we  have  described.  Three  members  of 
the  board  of  directors  constitute  an  advisory  committee  whose 
duty  it  is  to  consult  with  the  manager  as  to  purchases  of  stock, 
and  to  approve  all  bills  before  the  same  are  paid  by  the  treas- 
urer. The  latter  officer  is  placed  under  bonds.  The  manager 
is  held  responsible  for  the  correct  accounting  of  stock  in  trade, 
makes  a  daily  report  of  sales  and  accounts  to  the  treasurer, 

*  J.  B.  Long,  Rusk,  Texas. 


104  A  MANUAL  OF 

and  takes  account  of  stock  quarterly.     He  gives  such  bonds  as 
the  directors  require  for  the  faithful  performance  of  his  duties. 

Members  may  hold  from  one  to  two  hundred  shares.  The 
par  value  of  shares  is  five  dollars.  Members  upon  joining  pay 
an  initiation  fee  of  50  cents,  all  sums  so  received  being  carried 
to  the  sinking  fund,  to  which  fund  is  also  carried  not  less  than 
ten  per  cent  of  profits  annually.  Under  the  rules  the  sinking 
fund  is  to  be  allowed  to  accumulate  until  it  shall  amount  to  30 
per  cent  in  excess  of  the  capital  stock.  Amounts  carried  to 
the  sinking  fund,  and  other  sums  in  excess  of  the  business 
needs  of  the  association,  are  placed  on  deposit  in  the  savings 
bank  until  sufficient  in  the  aggregate  to  purchase  five  shares  of 
Arlington  mills  stock,  when  the  deposit,  at  the  discretion  of 
the  directors,  may  be  withdrawn  and  invested  in  such  stock 
under  such  provisions  as  the  treasurer  of  the  corporation  and 
the  State  law  may  require.  "  On  all  certificates  of  stock  thus 
issued  there  shall  be  endorsed  the  provision  that  interest  shall 
be  paid  at  the  rate  of  1  per  cent  less  than  the  average  dividend 
declared  by  the  Arlington  corporation  for  the  current  year."* 
This  provision  as  to  investments,  taken  together  with  the  fact 
that  members  must  be  employes  of  the  Arlington  corporation, 
introduces  indirectly  a  productive  element. 

The  cash  system  is  enforced.  No  intoxicating  liquors  are 
sold.  Sales  are  made  at  the  average  retail  market  price.  Each 
stockholder  has  one  vote  in  business  meetings.  Shares  are 
withdrawable  after  thirty  days'  notice,  or  if,  for  any  reason, 
payment  is  delayed  after  thirty  days  upon  shares  which  a  mem- 
ber has  duly  signified  his  intention  to  withdraw,  such  shares 
may  be  transferred  to  any  other  member  who  has  not  already 
the  maximum  number  of  shares  to  which  he  is  entitled  under  the 
rules ;  but  no  transfer  can  be  made  to  non-members,  unless  by 
the  consent  of  the  directors,  in  writing,  signed  by  the  president 
and  secretary,  and  entered  upon  the  records  of  the  association. 

After  providing  for  the  sinking  fund,  interest  on  capital 
stock  at  the  rate  of  five  per  cent  annually,  and  the  payment  of 
taxes,  profits  are  divided  quarterly  in  proportion  to  the  pur- 
chases of  the  recipients,  non-members  sharing  at  half  the  rate 
allowed  to  members.  After  one  dollar  has  been  paid  in  on 

*  Bv-laws  of  the  Association. 


DISTRIBUTIVE  CO-OPERATION. 


105 


stock  subscribed  for,  the  subscriber  is  entitled  to  a  full  divi- 
dend. Dividends  and  interest  declared  on  stock  may  remain 
on  deposit.  Interest  on  money  paid  in  for  shares  commences 
on  the  first  of  each  month.  No  interest  is  paid  on  shares 
withdrawn  before  the  end  of  the  quarter.  When  the  undrawn 
dividends  and  interest  placed  to  the  credit  of  any  person 
amount  to  the  par  value  of  one  share,  interest  is  declared  on 
the  accumulation  in  the  same  manner  as  provided  for  money 
paid  in  for  shares,  provided  that  such  accumulation,  together 
with  the  original  shares  invested,  shall  not  exceed  the  par  value 
of  200  shares. 

The  association  was  incorporated  July  8,  1884.  Business 
was  begun  September  15,  1884,  and  the  first  fiscal  year  was 
closed  October  1,  1885.  The  average  capital  for  the  year, 
$3,320,  was  turned  over  more  than  eleven  times  and  thus 
realized  a  return  of  nearly  74  per  cent  in  less  than  13  months. 
The  following  statistical  statement  from  the  directors'  report 
exhibits  the  uniform  progress  of  the  association  : 

Progress  of  the  Arlington  Co-operative  Association. 


CLASSIFICATION. 

Total 

Sales. 

Gross 
Profits. 

Salaries, 
Expenses, 
and 
Interest. 

Net 
Profits. 

First  quarter,  15  weeks,     

$10,828  89 

$1,743  62 

$1,024  93 

$718  69 

Second  quarter,  13  weeks  
Third  quarter  13  weeks 

8,783  92 
8  615  01 

1,479  52 
1  087  15 

954  98 
830  46 

524  54 
256  69 

Fourth  quarter,  13  weeks,         .... 

9,967  12 

1,809  75 

1,036  61 

773  14 

Totals,  

$38,194  94 

$6,120  04 

$3,846  98 

$2,273  06 

Progress  of  the  Arlington  Co-operative  Association  —  Concluded. 


CLASSIFICATION. 

Profits 
divided. 

Carried  to 

Sinking 
Fund. 

Interest  on 
Capital. 

Total 
Return  on 
Capital. 

First  quarter,  15  weeks,     ..... 

$544  54 

$174  15 

$51  13 

$769  82 

Second  quarter,  13  weeks,         .... 

449  44 

348  58 

75  10 
91  89* 

40  48 
40  89 

565  02 
297  58 

607  42 

165  72 

40  74 

813  88 

Totals  

$1,949  98 

$323  08 

$173  24 

$2,446  30 

*  This  amount  deducted. 


106     A  MANUAL  OF  DISTRIBUTIVE  CO-OPERATION. 

The  totals  of  the  foregoing  table  afford  the  basis  for  the  fol- 
lowing statement :  The  gross  profit  amounts  to  16.02  per  cent 
on  sales ;  salaries  and  expenses  10.07  per  cent  on  sales ;  net 
profits  5.95  per  cent  on  sales ;  the  profits  divided  represent  an 
average  on  checks  returned  of  6.24  per  cent  for  full  dividend 
and  3.12  per  cent  for  half  dividend;  the  sinking  fund  repre- 
sents more  than  14  per  cent  of  net  profits  besides  initiation 
fees ;  the  interest  is  5  per  cent  on  capital,  and  the  total  return 
on  capital  is  73.68  per  cent. 

At  the  close  of  the  first  year's  business  the  share  capital  rep- 
resented 664  shares ;  merchandise  in  stock,  including  dry 
goods  and  fuel,  amounted  to  $2,554.27 ;  fixtures,  $767.28  ; 
cash  in  bank,  $1,249.26;  and  the  association  might  well  con- 
gratulate itself  on  the  results  accomplished,  and  the  prosperous 
future  apparently  before  it. 


INDEX   TO   SUBJECTS. 


PAGE 

INTRODUCTION, - 5,  6 

Legislative  action  respecting  a  pamphlet  on  co-operation 5 

Sources  of  information, 5,  6 

WHAT  is  CO-OPERATION  ? 6-8 

Co-operation  as  first  advocated, 6 

Co-operation  at  present, 7 

Co-operation  as  defined  by  Holyoake, 7 

Co-operative,  as  distinguished  from  joint  stock  associations, ....  8 

Distributive  co-operation  defined, 8 

HISTORY  OP  THE  MOVEMENT, 8-22 

The  early  social  reformers, 8 

Robert  Owen,  and  his  influence, 8,  9 

The  first  co-operative  newspaper, 9 

The  London  Co-operative  Society,    .                               9 

The  first  co-operative  Congress, 9 

Co-operative  societies  in  1830, 10 

Character  of  early  co-operative  experiments .        .  10 

Table  showing  existing  societies  established  before  1844,        ....  11 

Failure  of  early  stores,  and  the  cause, 11,  12 

The  plan  of  M.  Louis  Blanc, 12,  13 

Thomas  Hughes'  opinion  of  Blanc's  work 13 

Organization  of  the  Rochdale  Pioneers, 13, 14 

Statistics  of  the  Rochdale  Pioneers, 15,  16 

Cardinal  principles  observed  at  Rochdale, 16 

Progress  of  co-operation  after  1844, 17 

Frederic  Maurice,  and  his  work, 18 

Legislation  promoting  co-operation, 18,  19 

Holyoake's  history  published,  and  its  influence, 19 

Co-operation  in  1862, 19 

The  establishment  of  the  English  wholesale  society, 19 

The  establishment  of  the  Scottish  wholesale  society, 20 

The  establishment  of  the  Central  Co-operative  Board, 20 

The  establishment  of  a  newspaper  organ, 20 

Co-operation  on  the  civil  service  plan, 20,  21 

Summary  of  co-operative  progress  since  1824, 21 

Early  and  later  efforts  contrasted, 22 

THE  FOUNDATION  IN  LAW, 22-25 

Statutes  now  in  force, 22 

Provisions  respecting  organization, 22 

Corporate  powers  of  societies,   ...  - 23 

Rules,  how  amended, 23 

[107] 


108  INDEX  TO  SUBJECTS. 

THE  FOUNDATION  IN  LAW  —  Continued.  PAGE 

Power  of  societies  to  contract, 23 

Provisions  as  to  trading, 23 

Power  to  make  loans, 23 

Tax  exemption 23 

Settlement  of  disputes, 23 

Consolidation,  and  dissolution, 23,  24 

Rights  of  minors  in  societies, 24 

Members  and  their  liability, 24 

Shares,  number  permitted  to  be  held, 24 

Provisions  respecting  members  dying  intestate, 24 

Official  investigation,  how  secured, 24 

Seals,  offices,  and  returns, 24,  25 

Penalties, 25 

THE  RETAIL  STORE, 25-39 

Introductory  remarks, 25 

FIRST  STEPS, 25 

CAPITAL, 25, 26 

SHARES, 26 

NATURE  OF  SHARE  CAPITAL, 26-28 

PAYMENT  OP  SUBSCRIBED  CAPITAL 28 

REGISTRATION, 28 

THE  EXECUTIVE  COMMITTEE, 28-30 

Duties  of  the  committee, 28 

Number  of  members, ' 29 

Tenure  of  office, 29 

President,  how  elected, 29 

Secretary  and  Treasurer, 29 

Fees  of  members, 29,  30 

Bonds, 30 

BUSINESS  PREMISES, 30 

THE  STOREKEEPER, 30 

STORE  FITTINGS, * .        .  30, 31 

STOCK  IN  TRADE, 31,  32 

Importance  of  careful  purchases, 31 

Range  of  articles  to  be  kept  in  stock, 31,  32 

Amount  of  stock, 32 

Prices, 32 

THE  CHECK  SYSTEM, .        .        .  32, 33 

Checks  to  prove  purchases, 33 

Fraud  in  the  use  of  checks, 33 

Checks  upon  the  manager, 33 

DUTIES  OF  ME3IBERS, 33-35 

STOCK-TAKING  AND  AUDITING, 35,  36 

Fair  stock-taking  important, 35 

Auditing,  how  conducted, 35,  36 

ALLOTMENT  OF  PROFITS, 36,  37 

Provisions  of  the  model  rules, 36 

Depreciation  of  property,    ..........  36 

Reserve  fund, 37 

Educational,  social,  and  benevolent  fund, 37 

Congress  fund, 37 

Bonus  to  employed, 37 

THE  BALANCE  SHEET, 38 

SUMMARY  OF  ESSENTIAL  POINTS 38,  39 


INDEX  TO  SUBJECTS.  109 

PAGE 

THE  WHOLESALE  STORES, 39-50 

Benefits  of  the  wholesale  stores 39,  40 

Failure  of  early  attempts, 40 

Organization  of  the  English  society, 40 

Value  of  shares, 41 

Goods,  how  sold, 41 

Profits,  how  divided, 41 

Establishment  of  central  and  branch,  departments, 41 

The  shipping  business, 41 

The  banking  department, 42 

Administration  of  the  society, 42,  43 

Provisions  governing  business  with  retail  societies, 43 

The  Scottish  wholesale  society, 43,  44 

Statistical  statement  of  relations  existing  between  the  retail  .societies- -and 

the  English  wholesale, 44 

The  amount  of  patronage  furnished  by  the  retails  considered,       .        .        .45,  46 

Surplus  capital  and  its  effects, 46,  47 

Productive  enterprises  of  the  English  wholesale, 47,  48 

The  Crumpsall  works, 47 

The  Leicester  and  Heckmondwike  Shoe  Works, 47,  48 

The  Durham  works, 48 

Tabular  statement  of  profits  of  production, 48 

Profits  of  the  shipping  enterprises, 49 

Surplus  capital  further  considered, 49,  50 


STATISTICAL  ABSTRACT, 50-63 

Sources  of  information, 50,  51 

Co-operative  societies  in  the  United  Kingdom  — 1862-1883 52,  53 

Co-operative  societies  in  Great  Britain  — 1862-1883, 52,  53 

Co-operative  societies  in  England  and  Wales  — 1862-1883,  .  .  .  .  54,  55 

Co-operative  societies  in  Scotland  — 1872-1883, 54,55 

Co-operative  societies  in  Ireland  — 1872-1883, 54,  55 

Results  shown  by  the  tables, 56 

Co-operation  in  England  and  Wales,  1872  and  1883  compared,  ...  56 

Co-operation  in  Scotland,  1872  and  1883  compared, 56 

Co-operation  in  Ireland,  1872  and  1883  compared, 56 

Results  of  the  comparisons, 57 

Total  population  connected  with  tlie  movement, 57 

Ratio  of  sales,  expenses,  and  profits  to  members, 57 

Statistics  of  societies  with  annual  sales  amounting  to  £200,000  or  more,  — 

1866-1883, 58,59 

Statistics  of  the  English  wholesale  society  from  March,  1864,  to  June, 

1885, 60,61 

Miscellaneous  statistics  of  the  English  wholesale, 62 

Statistics  of  the  Scottish  wholesale  — 1869-1883, 63 

THE  CO-OPERATIVE  UNION, 63-68 

Objects  of  the  Union, 63,  64 

Provisions  respecting  membership, 64 

Organization  of  the  Union, 64-66 

Proceedings  of  the  Congresses, 66 

Subjects  discussed  at  the  Congresses, 66 

Statistics  of  the  Union  — 1869-1885, 67 

The  work  of  the  Central  Board, 67,  68 

The  Southern  Guild, 68 


110  INDEX  TO  SUBJECTS. 

PAGE 

REVIEW  or  DISTRIBUTIVE  CO-OPERATION  IN  GREAT  BRITAIN,         .        .       .  68-74 

The  advantages  of  organization, 68 

Reasons  for  success, 68 

How  far  the  movement  is  co-operative, 69 

Criticism  to  which  the  movement  is  open, 69,  70 

How  producers  and  wage  workers  are  affected, 70,  71 

Benefits  of  distributive  co-operation, 72-74 

APPENDIX, 75-106 

Introductory  remarks, 75 

CO-OPERATIVE  PRODUCTION  IN  GREAT  BRITAIN, 75-81 

Views  of  leaders  of  the  movement, 75,  76 

Two  schools  of  productive  co-operation, 76 

Individualists  and  federalists, 76,  77 

Difficulties  and  advantages  of  each  system, 77 

Theories  of  Holyoake  and  others, 77-79 

What  has  actually  been  done, 79-81 

Table  showing  co-operative  productive  societies,       ....  80 

CO-OPERATION  IN  FRANCE 81-86 

Progress  of  the  movement, 81 

Statistics  of  co-operative  societies  of  Paris, 82-85 

Details  of  administration, 84-86 

CO-OPERATION  IN  GERMANY, 86-90 

Modes  of  development 85 

Classification  of  German  societies, 86 

The  raw  material  supply  associations, 86,  87 

The  industrial  magazines, 87 

The  industrial  productive  societies, 87,  88 

The  agricultural  societies, 88 

German  co-operative  unions, 88,  89 

Consumers'  societies, 89 

Classification  of  members  in  people's  banks  and  consumers'  societies,   .  89,  90 

CO-OPERATION  IN  AUSTRIA, 90-92 

Statute  provisions, 90,  91 

Statistics  of  Austrian  societies, 91 

Distributive  societies, 91,  92 

Productive  societies, 92 

CO-OPERATION  IN  DENMARK, 92,  93 

CO-OPERATION  IN  SPAIN, 

CO-OPERATION  IN  HUNGARY, 93,  94 

CO-OPERATION  IN  ITALY, 94-98 

Co-operative  banks  in  Italy 

Distributive  societies, 94-96 

Co-operative  bakeries, 

Productive  co-operation, 96-9£ 

Co-operative  associations  of  day  laborers, 97,  89 


INDEX  TO  SUBJECTS.  Ill 

APPENDIX—  Continued.  PAGE 

CO-OPERATION  IN  SWEDEN, .  98, 99 

The  "Workmen's  Ring  Society, 98,  99 

Co-operative  banking, 99 

CO-OPERATION  IN  SWITZERLAND, 100 

CO-OPERATION  IN  THE  NETHERLANDS, 100-102 

Statistics  of  societies, 101 

Consumers'  societies, 101 

Co-operative  bakeries, 101 

The  agricultural  societies, 101 

Wholesale  agency  of  the  Society  for  Self  Help, 102 

CO-OPERATION  IN  AUSTRALIA, 102 

THE  ARLINGTON  CO-OPERATIVE  ASSOCIATION,  AT  LAWRENCE,  MASS.,       .  103-106 

Distributive  co-operation  in  the  United  States, 103 

Plan  of  the  Arlington  Association, 103 

Its  officers,  how  chosen, 103 

Mode  of  administration  of  the  society, 103,  104 

Provisions  as  to  shares, 104 

The  sinking  fund, 104 

Profits,  how  divided, 104,  105 

Statistics  of  the  Association, .  105,  106 


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